Consumer Behaviour Workbook
Consumer Behaviour Workbook
Consumer Behaviour Workbook
Consumer behavior is the study of how people buy, what they buy, when they buy and
why they buy. It attempts to understand the buyer decision making process, both
individually and in groups. It studies characteristics of individual consumers such as
demographics, psycho graphics, and behavioral variables in an attempt to understand
people's wants. It also tries to assess influences on the consumer from groups such as
family, friends, reference groups, and society in general.
1. From the customers' point of view : Customers today are in a tough spot. Today, in
the highly developed & technologically advanced society, the customers have a
great deal of choices & options (and often very close & competing) to decide on.
1. They have the products of an extreme range of attributes (the 1st P -
Product),
2. they have a wide range of cost and payment choices (the 2nd P - Price),
3. they can order them to be supplied to their door step or anywhere else (the
3rd P - Place),
4. and finally they are bombarded with more communications from more
channels than ever before (the 4th P - Promotion).
How can they possibly decide where to spend their time and money, and
where they should give their loyalty ?
1. From the marketers' point of view : "The purpose of marketing is to sell more
stuff to more people more often for more money in order to make more profit".
This is the basic principle of requirement for the marketers in earlier days where
aggressive selling was the aim. Now it can't be achieved by force, aggression or
plain alluring. For the customers are today more informed, more knowledgeable,
more demanding, more discerning. And above all there is no dearth of marketers
to buy from. The marketers have to earn them or win them over.
1. A marketing manager would like to know how consumer behaviour will help him
to design better marketing plans to get those plans accepted within the company.
3. Universities & Colleges now recognize that they need to know about consumer
behaviour to aid in recruiting students. "Marketing Admissions" has become an
accepted term to mean marketing to potential students.
• The psychology of how consumers think, feel, reason, and select between
different alternatives (e.g., brands, products);
• The psychology of how the consumer is influenced by his or her environment
(e.g., culture, family, signs, media);
• The behavior of consumers while shopping or making other marketing decisions;
• Limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome;
• How consumer motivation and decision strategies differ between products that
differ in their level of importance or interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.
• Behavior occurs either for the individual, or in the context of a group (e.g., friends
influence what kinds of clothes a person wears) or an organization (people on the
job make decisions as to which products the firm should use).
• Consumer behavior involves the use and disposal of products as well as the study
of how they are purchased. Product use is often of great interest to the marketer,
because this may influence how a product is best positioned or how we can
encourage increased consumption. Since many environmental problems result
from product disposal (e.g., motor oil being sent into sewage systems to save the
recycling fee, or garbage piling up at landfills) this is also an area of interest.
• Consumer behavior involves services and ideas as well as tangible products.
• The impact of consumer behavior on society is also of relevance. For example,
aggressive marketing of high fat foods, or aggressive marketing of easy credit,
may have serious repercussions for the national health and economy.
Primary Methods. Several tools are available to the market researcher—e.g., mail
questionnaires, phone surveys, observation, and focus groups.
Surveys are useful for getting a great deal of specific information. Surveys can contain
open-ended questions (e.g., “In which city and state were you born? ____________) or
closed-ended, where the respondent is asked to select answers from a brief list (e.g.,
“__Male ___ Female.” Open ended questions have the advantage that the respondent is
not limited to the options listed, and that the respondent is not being influenced by
seeing a list of responses. However, open-ended questions are often skipped by
respondents, and coding them can be quite a challenge. In general, for surveys to yield
meaningful responses, sample sizes of over 100 are usually required because precision is
essential. For example, if a market share of twenty percent would result in a loss while
thirty percent would be profitable, a confidence interval of 20-35% is too wide to be
useful.
Surveys come in several different forms. Mail surveys are relatively inexpensive, but
response rates are typically quite low—typically from 5-20%. Phone-surveys get
somewhat higher response rates, but not many questions can be asked because many
answer options have to be repeated and few people are willing to stay on the phone for
more than five minutes. Mall intercepts are a convenient way to reach consumers, but
respondents may be reluctant to discuss anything sensitive face-to-face with an
interviewer.
Surveys, as any kind of research, are vulnerable to bias. The wording of a question can
influence the outcome a great deal. For example, more people answered no to the
question “Should speeches against democracy be allowed? than answered yes to
“Should speeches against democracy be forbidden?” For face-to-face interviews,
interviewer bias is a danger, too. Interviewer bias occurs when the interviewer
influences the way the respondent answers. For example, unconsciously an interviewer
that works for the firm manufacturing the product in question may smile a little when
something good is being said about the product and frown a little when something
negative is being said. The respondent may catch on and say something more positive
than his or her real opinion. Finally, a response bias may occur—if only part of the
sample responds to a survey, the respondents answers may not be representative of the
population.
Focus groups are useful when the marketer wants to launch a new product or modify an
existing one. A focus group usually involves having some 8-12 people come together in
a room to discuss their consumption preferences and experiences. The group is usually
led by a moderator, who will start out talking broadly about topics related broadly to the
product without mentioning the product itself. For example, a focus group aimed at
sugar-free cookies might first address consumers snacking preferences, only gradually
moving toward the specific product of sugar-free cookies. By not mentioning the
product up front, we avoid biasing the participants into thinking only in terms of the
specific product brought out. Thus, instead of having consumers think primarily in terms
of what might be good or bad about the product, we can ask them to discuss more
broadly the ultimate benefits they really seek. For example, instead of having consumers
merely discuss what they think about some sugar-free cookies that we are considering
releasing to the market, we can have consumers speak about their motivations for using
snacks and what general kinds of benefits they seek. Such a discussion might reveal a
concern about healthfulness and a desire for wholesome foods. Probing on the meaning
of wholesomeness, consumers might indicate a desire to avoid artificial ingredients. This
would be an important concern in the marketing of sugar-free cookies, but might not
have come up if consumers were asked to comment directly on the product where the
use of artificial ingredients is, by virtue of the nature of the product, necessary.
Focus groups are well suited for some purposes, but poorly suited for others. In general,
focus groups are very good for getting breadth—i.e., finding out what kinds of issues are
important for consumers in a given product category. Here, it is helpful that focus groups
are completely “open-ended: The consumer mentions his or her preferences and
opinions, and the focus group moderator can ask the consumer to elaborate. In a
questionnaire, if one did not think to ask about something, chances are that few
consumers would take the time to write out an elaborate answer. Focus groups also have
some drawbacks, for example:
• They represent small sample sizes. Because of the cost of running focus groups,
only a few groups can be run. Suppose you run four focus groups with ten
members each. This will result in an n of 4(10)=40, which is too small to
generalize from. Therefore, focus groups cannot give us a good idea of:
• What proportion of the population is likely to buy the product.
• What price consumers are willing to pay.
• The groups are inherently social. This means that:
• Consumers will often say things that may make them look good (i.e., they watch
public television rather than soap operas or cook fresh meals for their families
daily) even if that is not true.
• Consumers may be reluctant to speak about embarrassing issues (e.g., weight
control, birth control).
To get a person to elaborate, it may help to try a common tool of psychologists and
psychiatrists—simply repeating what the person said. He or she will often become
uncomfortable with the silence that follows and will then tend to elaborate. This
approach has the benefit that it minimizes the interference with the respondent’s own
ideas and thoughts. He or she is not influenced by a new question but will, instead, go
more in depth on what he or she was saying.
Projective techniques are used when a consumer may feel embarrassed to admit to
certain opinions, feelings, or preferences. For example, many older executives may not
be comfortable admitting to being intimidated by computers. It has been found that in
such cases, people will tend to respond more openly about “someone else.” Thus, we
may ask them to explain reasons why a friend has not yet bought a computer, or to tell a
story about a person in a picture who is or is not using a product. The main problem
with this method is that it is difficult to analyze responses.
Projective techniques are inherently inefficient to use. The elaborate context that has to
be put into place takes time and energy away from the main question. There may also be
real differences between the respondent and the third party. Saying or thinking about
something that “hits too close to home may also influence the respondent, who may or
may not be able to see through the ruse.
A question arises as to whether this type of “spying inappropriately invades the privacy
of consumers. Although there may be cause for some concern in that the particular
individuals have not consented to be part of this research, it should be noted that there is
no particular interest in what the individual customer being watched does. The question
is what consumers—either as an entire group or as segments—do. Consumers benefit,
for example, from stores that are designed effectively to promote efficient shopping. If it
is found that women are more uncomfortable than men about others standing too close,
the areas of the store heavily trafficked by women can be designed accordingly. What is
being reported here, then, are averages and tendencies in response. The intent is not to
find “juicy observations specific to one customer.
The video clip with Paco Under hill that we saw in class demonstrated the application of
observation research to the retail setting. By understanding the phenomena such as the
tendency toward a right turn, the location of merchandise can be observed. It is also
possible to identify problem areas where customers may be overly vulnerable to the “but
brush, or overly close encounter with others. This method can be used to identify
problems that the customer experiences, such as difficulty finding a product, a mirror, a
changing room, or a store employee for help.
On line research methods: The Internet now reaches the great majority of households
in the U.S., and thus, online research provides new opportunity and has increased in use.
One potential benefit of online surveys is the use of “conditional branching.” In
conventional paper and pencil surveys, one question might ask if the respondent has
shopped for a new car during the last eight months. If the respondent answers “no, he or
she will be asked to skip ahead several questions—e.g., going straight to question 17
instead of proceeding to number 9. If the respondent answered “yes, he or she would be
instructed to go to the next question which, along with the next several ones, would
address issues related to this shopping experience. Conditional branching allows the
computer to skip directly to the appropriate question. If a respondent is asked which
brands he or she considered, it is also possible to customize brand comparison questions
to those listed. Suppose, for example, that the respondent considered Ford, Toyota, and
Hyundai, it would be possible to ask the subject questions about his or her view of the
relative quality of each respective pair—in this case, Ford vs. Toyota, Ford vs. Hyundai,
and Toyota vs. Hyundai.
There are certain drawbacks to online surveys. Some consumers may be more
comfortable with online activities than others—and not all households will have access.
Today, however, this type of response bias is probably not significantly greater than that
associated with other types of research methods. A more serious problem is that it has
consistently been found in online research that it is very difficult—if not impossible—to
get respondents to carefully read instructions and other information online—there is a
tendency to move quickly. This makes it difficult to perform research that depends on
the respondent’s reading of a situation or product description.
On line search data and page visit logs provides valuable ground for analysis. It is
possible to see how frequently various terms are used by those who use a firm’s web site
search feature or to see the route taken by most consumers to get to the page with the
information they ultimately want. If consumers use a certain term frequently that is not
used by the firm in its product descriptions, the need to include this term in online
content can be seen in search logs. If consumers take a long, “torturous route to
information frequently accessed, it may be appropriate to redesign the menu structure
and/or insert hyper links in “intermediate pages that are found in many users routes.
Scanner data:
Many consumers are members of supermarket “clubs.” In return for signing p for
a card and presenting this when making purchases, consumers are often eligible for
considerable discounts on selected products.
Researchers use a more elaborate version of this type of program in some
communities. Here, a number of consumers receive small payments and/or other
incentives to sign up to be part of a research panel. They then receive a card that they are
asked to present any time they go shopping. Nearly all retailers in the area usually
cooperate. It is now possible to track what the consumer bought in all stores and to have
a historical record.
The consumer’s shopping record is usually combined with demographic
information (e.g., income, educational level of adults in the household, occupations of
adults, ages of children, and whether the family owns and rents) and the family’s
television watching habits. (Electronic equipment run by firms such as A. C. Nielsen
will actually recognize the face of each family member when he or she sits down to
watch).
It is now possible to assess the relative impact of a number of factors on the consumer’s
choice—e.g.,
What brand in a given product category was bought during the last, or a series of
past, purchase occasions;
Whether, and if so, how many times a consumer has seen an ad for the brand in
question or a competing one;
Whether the target brand (and/or a competing one) is on sale during the store visit;
Whether any brand had preferential display space;
The impact of income and/or family size on purchase patterns; and
Whether a coupon was used for the purchase and, if so, its value.
A “split cable technology allows the researchers to randomly select half the panel
members in a given community to receive one advertising treatment and the other half
another. The selection is truly random since each household, as opposed to
neighborhood, is selected to get one treatment or the other. Thus, observed differences
should, allowing for sampling error, the be result of advertising exposure since there are
no other systematic differences between groups.
Interestingly, it has been found that consumers tend to be more influenced by
commercials that they “zap through while channel surfing even if they only see part of
the commercial. This most likely results from the reality that one must pay greater
attention while channel surfing than when watching a commercial in order to determine
which program is worth watching.
Scanner data is, at the present time, only available for certain grocery item product
categories—e.g., food items, beverages, cleaning items, laundry detergent, paper towels,
and toilet paper. It is not available for most non-grocery product items. Scanner data
analysis is most useful for frequently purchased items (e.g., drinks, food items, snacks,
and toilet paper) since a series of purchases in the same product category yield more
information with greater precision than would a record of one purchase at one point in
time. Even if scanner data were available for electronic products such as printers,
computers, and MP3 players, for example, these products would be purchased quite
infrequently. A single purchase, then, would not be as effective in effectively
distinguishing the effects of different factors—e.g., advertising, shelf space, pricing of
the product and competitors, and availability of a coupon—since we have at most one
purchase instance during a long period of time during which several of these factors
would apply at the same time. In the case of items that are purchased frequently, the
consumer has the opportunity to buy a product, buy a competing product, or buy nothing
at all depending on the status of the brand of interest and competing brands. In the case
of the purchase of an MP3 player, in contrast, there may be promotions associated with
several brands going on at the same time, and each may advertise. It may also be that the
purchase was motivated by the breakdown of an existing product or dissatisfaction or a
desire to add more capabilities.
By attaching a tiny camera to plain eye glasses worn by the subject while watching an
advertisement, it is possible to determine where on screen or other ad display the subject
focuses at any one time. If the focus remains fixed throughout an ad sequence where the
interesting and active part area changes, we can track whether the respondent is
following the sequence intended. If he or she is not, he or she is likely either not to be
paying as much attention as desired or to be confused by an overly complex sequence. In
situations where the subject’s eyes do move, we can assess whether this movement is
going in the intended direction.
Mind-reading would clearly not be ethical and is, at the present time, not possible in any
event. However, it is possible to measure brain waves by attaching electrodes. These
readings will not reveal what the subject actually thinks, but it is possible to distinguish
between beta waves—indicating active thought and analysis—and alpha waves,
indicating lower levels of attention.
Cautions:
Some cautions should be heeded in marketing research. First, in general, research should
only be commissioned when it is worth the cost. Thus, research should normally be
useful in making specific decisions (what size should the product be? Should the product
be launched? Should we charge $1.75 or $2.25?)
Secondly, marketing research can be, and often is, abused. Managers frequently have
their own “agendas (e.g., they either would like a product to be launched or would prefer
that it not be launched so that the firm will have more resources left over to tackle their
favorite products). Often, a way to get your way is to demonstrate through “objective
research that your opinions make economic sense. One example of misleading research,
which was reported nationwide in the media, involved the case of “The Pentagon
Declares War on Rush Limbaugh.” The Pentagon, within a year of the election of
Democrat Bill Clinton, reported that only 4.2% of soldiers listening to the Armed Forces
Network wanted to hear Rush Limbaugh. However, although this finding was reported
without question in the media, it was later found that the conclusion was based on the
question “What single thing can we do to improve programming?” If you did not write
in something like “Carry Rush Limbaugh, you were counted as not wanting to hear him.
Sub-Culture
Demographics
Social Status
Learning
Memory
Motives
Personality
Emotions
Attitudes
Physical factors also influence our behavior. We are more likely to buy a soft drink
when we are thirsty, for example, and food manufacturers have found that it is more
effective to advertise their products on the radio in the late afternoon when people are
getting hungry.
A person’s self-image will also tend to influence what he or she will buy—an upwardly
mobile manager may buy a flashy car to project an image of success.
Social factors also influence what the consumers buy—often, consumers seek to imitate
others whom they admire, and may buy the same brands. The social environment can
include both the mainstream culture (e.g., Americans are more likely to have corn flakes
or ham and eggs for breakfast than to have rice, which is preferred in many Asian
countries) and a subculture (e.g., rap music often appeals to a segment within the
population that seeks to distinguish itself from the mainstream population). Thus,
sneaker manufacturers are eager to have their products worn by admired athletes.
To reap the maximum benefits from data analytics, firms have to invest in
the right technology, hire the right people and develop standardized and robust processes
of data collection, data retrieval, data analysis and strategy implementation.
Cultural Factors:
In a diversified country like India cultural factors exert the broadest and deepest
influence on consumer behavior; we will look at the role played by the buyer’s culture,
subculture, and social class.
Culture is part of the external influences that impact the consumer. That is, culture
represents influences that are imposed on the consumer by other individuals.
The definition of culture offered in one textbook is “That complex whole which includes
knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by
man person as a member of society.” From this definition, we make the following
observations:
Culture, as a “complex whole, is a system of interdependent components.
Knowledge and beliefs are important parts. In the U.S., we know and believe that
a person who is skilled and works hard will get ahead. In other countries, it may
be believed that differences in outcome result more from luck. “Chunking, the
name for China in Chinese, literally means “The Middle Kingdom.” The belief
among ancient Chinese that they were in the center of the universe greatly
influenced their thinking.
Other issues are relevant. Art, for example, may be reflected in the rather arbitrary
practice of wearing ties in some countries and wearing turbans in others. Morality
may be exhibited in the view in the United States that one should not be naked in
public. In Japan, on the other hand, groups of men and women may take steam
baths together without perceived as improper. On the other extreme, women in
some Arab countries are not even allowed to reveal their faces. Notice, by the
way, that what at least some countries view as moral may in fact be highly
immoral by the standards of another country. For example, the law that once
banned interracial marriages in South Africa was named the “Immorality Act,
even though in most civilized countries this law, and any degree of explicit racial
prejudice, would itself be considered highly immoral.
Culture has several important characteristics:
Culture is comprehensive. This means that all parts must fit together in some
logical fashion. For example, bowing and a strong desire to avoid the loss of face
are unified in their manifestation of the importance of respect.
Culture is learned rather than being something we are born with. We will consider
the mechanics of learning later in the course.
Cultural lessons.
We considered several cultural lessons in class; the important thing here is the big
picture. For example, within the Muslim tradition, the dog is considered a “dirty animal,
so portraying it as “man’s best friend in an advertisement is counter-productive.
Packaging, seen as a reflection of the quality of the “real product, is considerably more
important in Asia than in the U.S., where there is a tendency to focus on the contents
which “really count.” Many cultures observe significantly greater levels of formality
than that typical in the U.S., and Japanese negotiator tend to observe long silent pauses
as a speaker’s point is considered.
Although Hofstede’s original work did not address this, a fifth dimension of long term
vs. short term orientation has been proposed. In the U.S., managers like to see quick
results, while Japanese managers are known for take a long term view, often accepting
long periods before profitability is obtained.
High vs. low context cultures: In some cultures, “what you see is what you get”
Social Class:
Virtually all human societies exhibit social stratification. Stratification sometimes takes
the form of a caste system where the member of different caste are reared for certain
roles and cannot change their caste membership .More frequently, stratification takes the
form of social classes .
Social Classes have several characteristics. First, Person with in each social class tend to
behave more alike than persons from two different social classes. Second, persons are
perceived as occupying inferior or superior positions according to their social class.
Third, a person’s social class is indicated by a number of variables, such as occupation,
income, wealth, education , and value orientation, rather than by any single variable ,
fourth, individuals are able to move from one social class to another up or down during
their lifetime. The Extent of this mobility varies according to the rigidity of social
stratification a given society.
Social Factors:
A consumer’s behavior is also influenced by social factors, such as the consumer’s
reference group, family, and social roles and statuses.
Group influences on consumer behavior can impact motivation, values, and individual
information processing; they can come from groups to which consumers already belong
or from groups to which they aspire to belong (aspirational groups). Groups can exert a
variety of influences on individuals, including: (1) informational influences where the
group acts as a source for expert opinions; (2) comparative influences such that the
group provides opportunities to manage the individual's self-concept with respect to the
group's identity; and, (3) normative influences, whereby the group specifies guidelines
and sanctions for appropriate or inappropriate individual behaviors.
The influence of groups on consumer behavior tends to vary with a variety of group and
product-related factors. For example, the more the group is perceived to be a credible,
valued source of approval or disapproval to the consumer, the more likely that consumer
is to conform to group values. In addition, the more frequently group members interact,
and the more outwardly visible use of the product is to group and non-group members,
the greater the group's influence on individual consumption behavior.
Family Group:
Members of the buyer’s family can exercise a strong influence on the buyer’s behavior.
we can distinguish between two families in the buyer’s life . The family of orientation
consists of one’s parents. From parents a persons acquires an orientation towards
religious, politics, and economics and a sense of personal ambitions, self –worth, and
love. Even if the buyer no longer interacts very much with his or her parents, the parents
influence on the unconscious behavior of the buyer can be significant. In countries
where parents continue to live with their children, their influence can be substantial.
In case of expensive products and services, husband and wives engage in more joint
decision making. The market needs to determine which member normally has the greater
influence in the purchase of a particular products or services. either the husband or the
wife , or they have equal influence . The following products and services fall under such:
Husband – dominant: life insurance, automobiles, television
Wife – dominant: washing machines, carpeting, non –living – room furniture,
kitchenware
Equal: Living – room furniture, vacation, Housing, outside entertainment.
Internal Influence:
Perception:
Perception is how we see ourselves and the world we live in. However, what ends up
being stored inside us doesn’t always get there in a direct manner. Often our mental
makeup results from information that has been consciously or subconsciously filtered as
we experience it, a process we refer to as a perceptual filter. To us this is our reality,
though it does not mean it is an accurate reflection on what is real. Thus, perception is
the way we filter stimuli (e.g., someone talking to us, reading a newspaper story) and
then make sense out of it.
Perception has several steps.
• Exposure – sensing a stimuli (e.g. seeing an ad)
• Attention – an effort to recognize the nature of a stimuli (e.g. recognizing it is an
ad)
• Awareness – assigning meaning to a stimuli (e.g., humorous ad for particular
product)
• Retention – adding the meaning to one’s internal makeup (i.e., product has fun
ads)
How these steps are eventually carried out depends on a person’s approach to learning.
By learning we mean how someone changes what they know, which in turn may affect
how they act. There are many theories of learning, a discussion of which is beyond the
scope of this tutorial, however, suffice to say that people are likely to learn in different
ways. For instance, one person may be able to focus very strongly on a certain
advertisement and be able to retain the information after being exposed only one time
while another person may need to be exposed to the same advertisement many times
before he/she even recognizes what it is. Consumers are also more likely to retain
information if a person has a strong interest in the stimuli. If a person is in need of new
car they are more likely to pay attention to a new advertisement for a car while someone
who does not need a car may need to see the advertisement many times before they
recognize the brand of automobile.
Consumer motivation:
A marketer's job is to figure out what needs and wants the consumer has,
and what motivates the consumer to purchase. Motivation is the drive that initiates all
our consumption behaviors, and consumers have multiple motives, or goals. Some of
these are overt, like a physiological thirst that motivates a consumer to purchase a soft
drink or the need to purchase a new suit for an interview. Other motives are more
obscure, like a student's need to tote a Kate Spade bookbag or wear Doc Martens to gain
social approval. Most consumption activities are the result of several motives operating
at the same time. Researchers specially trained in uncovering motives often use
qualitative research techniques in which consumers are encouraged to reveal their
thoughts (cognitions) and feelings (affect) through probing dialogue. Focus groups and
in-depth interviews give consumers an opportunity to discuss products and express
opinions about consumption activities. Trained moderators or interviewers are often able
to tap into preconscious motives that might otherwise go undetected. Sentence
completion tasks (e.g., Men who wear Old Spice are . . .) or variants of the Thematic
Apperception Tests (TAT), in which respondents are shown a picture and asked to tell a
story surrounding it, are additional techniques that provide insight into underlying
motives.
Consumer motives or goals can be represented by the values they hold.
Values are people's broad life goals that symbolize a preferred mode of behaving (e.g.,
independent, compassionate, honest) or a preferred end-state of being (e.g., sense of
accomplishment, love and affection, social recognition). Consumers buy products that
will help them achieve desired values; they see product attributes as a means to an end.
Understanding the means-end perspective can help marketers better position the product
and create more effective advertising and promotion campaigns.
Close your eyes and think for a moment about the hundreds of objects,
noises, and smells surrounding you at this very moment. In order to function in this
crowded environment, we choose to perceive certain stimuli while ignoring others. This
process is called selectivity. Selectivity lets us focus our attention on the things that
provide meaning for interpreting our environment or on the things that are relevant to us,
while not wasting our limited information-processing resources on irrelevant items. Did
you even notice that after you decide on, say, Florida, for your vacation destination,
there seems to be an abundance of ads for Florida resorts, airline promotions for Florida,
and articles about Florida restaurants and attractions everywhere? Coincidence? Not
really. There are just as many now as there were before, only now you are selectively
attending to them, whereas you previously filtered them out. Marketers continuously
struggle to break through the clutter and grab consumers' attention. Advertising and
packaging is designed to grab our attention through a host of techniques, like the use of
contrast in colors and sound, repetition, and contextual placement.
Did you watch TV last night? You may have paid attention to many of the
ads you saw during the commercial breaks; you may even have laughed out loud at a
few of them. But how many can you recall today? Consumers' ability to store, retain,
and retrieve product information is critical to a brand's success. When information is
processed, it is held for a very brief time (less than one minute) in working, or short-
term, memory. If this information is rehearsed (mentally repeated), it is transferred to
long-term memory; if not, the information is lost and forgotten. Once transferred to long-
term memory, information is encoded or arranged in a way that provides meaning to the
individual. Information in long-term memory is constantly reorganized, updated, and
rearranged as new information comes in, or learning takes place. Information-processing
theorists represent the storage of information in long-term memory as a network
consisting of nodes (word, idea, or concept) and links (relationships among them).
Nodes are connected to each other depending on whether there is an association between
concepts, with the length of the linkages representing the degree of the association.
Figure 2 illustrates a network model of long-term memory. When Edwin Land invented
the first Polaroid instant camera, knowledge structures for cameras changed to reflect
the association between photography and instant output. Now, knowledge structures are
changing to reflect the new I-Zone camera.
The complete network brought to mind when a product is activated is called
the product schema. Knowing the set of associations that consumers retrieve from long-
term memory about a particular product or category is critical to a successful marketing
strategy. For new products or services, marketers must first select the set of associations
they want consumers to have. This is called positioning the product, or selecting the
brand image.
Peak Freans' unique positioning as an adult cookie was accomplished by
establishing a link between the concept "serious" and "cookie." The brand position is
then translated into clever ads, reinforced on product packaging, and integrated into all
promotion and communication strategies. Over time, a brand's image can fade or
become diluted. Sometimes consumers associate concepts that are not favorable to a
brand. When this occurs, marketers reposition the brand, using advertising and other
marketing tools to help consumers create new links to positive association and discard
links to the unfavorable ones. In the mid-1990s, Hush Puppies shoes made a comeback
after decades of low sales. Introducing exciting, vibrant colors, Hush Puppies
repositioned their basic comfort shoe as fashionable, youth-oriented, and "cool."
Strategies for successful brand extensions also depend on the brand schema. Generally
speaking, a brand extension is more likely to be successful if the set of associations for
the extension matches the set of associations of the core product. Would Lifesavers
brand toothpaste sell? Probably not, because the associations for Lifesavers (sweet,
candy, sugar, fruity) are not the same as those for toothpaste (mint, clean, noncandy). On
the other hand, a Lifesavers brand sugared children's cereal with colorful, fruity rings
has a much better match of associations.
In general there are three ways of analyzing consumer buying decisions. They are:
• Economic models - These models are largely quantitative and are based on the
assumptions of rationality and near perfect knowledge. The consumer is seen to
maximize their utility. See consumer theory. Game theory can also be used in
some circumstances.
Nobel laureate Herbert Simon sees economic decision making as a vain attempt to
be rational. He claims (in 1947 and 1957) that if a complete analysis is to be done, a
decision will be immensely complex. He also says that peoples' information processing
ability is very limited. The assumption of a perfectly rational economic actor is
unrealistic. Often we are influenced by emotional and non-rational considerations. When
we try to be rational we are at best only partially successful.
Consumer Decision-Making Models, Strategies,
and Theories
This question is at the core of much of marketing examination over the past 60 or 70
years. As marketers manipulate the various principles of marketing, so do the consumers
they seek to reach–choosing which products and services to buy, and which not to buy,
choosing which brands to use, and which brands to ignore. The focus of this paper is to
examine the major decision-making models, strategies, and theories that underlie the
decision processes used by consumers and to provide some clarity for marketing
executives attempting to find the right mix of variables for their products and services.
Early economists, led by Nicholas Bernoulli, John von Neumann, and Oskar
Morgenstern, puzzled over this question. Beginning about 300 years ago, Bernoulli
developed the first formal explanation of consumer decision making. It was later
extended by von Neumann and Morgenstern and called the Utility Theory. This theory
proposed that consumers make decisions based on the expected outcomes of their
decisions. In this model consumers were viewed as rational actors who were able to
estimate the probabilistic outcomes of uncertain decisions and select the outcome which
maximized their well-being. However, as one might expect, consumers are typically not
completely rational, or consistent, or even aware of the various elements that enter into
their decision making. In addition, though consumers are good at estimating relative
frequencies of events, they typically have difficulty translating these frequencies into
probabilities. This Utility model, even though had been was viewed as the dominant
decision-making paradigm, had serious shortcomings that could not be explained by the
model.
Nobel Laureate Herbert Simon proposed an alternative, simpler model in the mid-1950s.
This model was called Satisficing, in which consumers got approximately where they
wanted to go and then stopped the decision-making process. An example of this would
be in the search for a new apartment. Under the Utility Theory, consumers would
evaluate every apartment in a market, and form a linear equation based on all the
pertinent variables, and then select the apartment that had the highest overall utility
score. With Satisficing, however, consumers might just evaluate apartments within a
certain distance to their desired location, stopping when they found one that was “good
enough.” This theory, though robust enough to encompass many of the shortcomings of
Utility Theory, still left significant room for improvement in the area of prediction. After
all, if a marketing executive can’t predict consumer behavior, then what use is a
decision-making paradigm. Simon and others have extended this area in the
investigation of the field of bounded rationality. Following Simon, additional efforts
were made to develop better understandings of consumer decision making, extending
beyond the mathematical optimization of Utility Theory and the somewhat unsatisfying
Satisficing Theory. In the late 1970s, two leading psychologists, Daniel Kahneman and
Amos Tversky, developed the Prospect Theory, which expanded upon both the Utility
Theory and Satisficing Theory to develop a new theory that encompassed the best
aspects of each, while solving many of the problems that each presented.
Two major elements that were added by Kahneman and Tversky were the
concepts of value (replacing the utility found in Utility Theory) and endowment, in
which an item is more precious if one owns it than if someone else owns it. Value
provided a reference point and evaluated both gains and losses from that reference point.
Additionally, gains and losses have a marginally decreasing increase from the
reference point. For example, there is a much greater value for the first incremental gain
from the reference point than for subsequent gains.
What this all led to was the development and exploration of a series of
useful consumer decision-making strategies that can be exploited by marketers. For each
product, marketers need to understand the specific decision-making strategy utilized by
each consumer segment acquiring that product. If this is done, marketers can position
their product in such a manner that the decision-making strategy leads consumers to
select their product. The first two strategies are called compensatory strategies. In these
strategies, consumers allow a higher value of one attribute to compensate for a lesser
value of another attribute. For example, if a consumer is looking at automobiles, a high
value in gas mileage might compensate for a lower value in seating space. The
attributes might have equal weight (EQUAL WEIGHT STRATEGY) or have different
weights for the attributes (WEIGHTED ADDITIVE STRATEGY).An example of the
latter might be to place twice as much importance on gas mileage than seating space.
The next three strategies are called non compensatory strategies. In these strategies, each
attribute of a specific product is evaluated without respect to the other attributes, and
even though a product may have a very high value on one attribute, if it fails another
attribute, it is eliminated from consideration.
From Simon, the first of these is SATISFICING, in which the first product
evaluated to meet cutoff values for all attributes is chosen, even if it is not the best.
The second of these strategies, ELIMINATION BY ASPECTS, sets a
cutoff value for the most important attribute, and allows all competing products that
meet that cutoff value to go to the next attribute and its cutoff value.
The third strategy, LEXICOGRAPHIC, evaluates the most important
attribute, and if a product is clearly superior to others, stops the decision process and
selects that product; otherwise, it continues to the next most important attribute.
The next two strategies are called partially compensatory strategies, in that
strategies are evaluated against each other in serial fashion and higher values for
attributes are considered. The first of these strategies is called MAJORITY OF
CONFORMING DIMENSIONS, in which the first two competing products are
evaluated across all attributes, and the one that has higher values across
more dimensions, or attributes, is retained. This winner is then evaluated against the next
competitor, and the one that has higher values across more dimensions is again retained.
Summary
Application of the three decision making models, the seven decision-
making strategies, and the two marketing theories can be seen in current efforts by
marketing practitioners and academicians to tease apart the complex decisions made by
consumers. For example,choice models and conjoint models are multivariate analysis
techniques based on these understandings. Consumers are presented with choices in
controlled environments that, hopefully, control for other confounding variables, and
then the choices are decomposed to understand both the conscious and unconscious
elements driving the consumer’s choices. One caveat for practitioners is important to
address at this point. When one is attempting to manipulate marketing variables such as
price or promotion, or even conduct research into consumer decision-making, it is
critical that a solid theoretical base be used. Without this base, the surveys have the
potential of producing contradictory or misleading answers, and the attempts to
manipulate the variables at hand may produce less.
AIUAPR Model:
Most directly links to the steps in the marketing/promotional process is often seen as the
most generally useful:
• AWARENESS - before anything else can happen the potential customers must
become aware that the product or service exists. Thus, the first task must be to
gain the attention of the target audience. All the different models are,
predictably, agreed on this first step. If the audience never hears the message,
they will not act on it, no matter how powerful it is
• INTEREST - but it is not sufficient to grab their attention. The message must
interest them and persuade them that the product or service is relevant to their
needs. The content of the message(s) must therefore be meaningful and clearly
relevant to that target audience's needs, and this is where marketing research
can come into its own.
• PURCHASE - all the above stages might happen in a few minutes while the
reader is considering the advertisement; in the comfort of his or her favorite
armchair. The final buying decision, on the other hand, may take place some
time later; perhaps weeks later, when the prospective buyer actually tries to
find a shop which stocks the product.
• REPEAT PURCHASE - but in most cases this first purchase is best viewed as
just a trial purchase. Only if the experience is a success for the customer will it
be turned into repeat purchases. These repeats, not the single purchase which is
the focus of most models, are where the vendors focus should be, for these are
where the profits are generated. The earlier stages are merely a very necessary
prerequisite for this.
This is a very simple model, and as such does apply quite generally. Its
lessons are that you cannot obtain repeat purchasing without going through the stages of
building awareness and then obtaining trial use; which has to be successful. It is a
pattern which applies to all repeat purchase products and services; industrial goods just
as much as baked beans. This simple theory is rarely taken any further - to look at the
series of transactions which such repeat purchasing implies. The consumer's growing
experience over a number of such transactions is often the determining factor in the later
- and future - purchases. All the succeeding transactions are, thus, interdependent - and
the overall decision-making process may accordingly be much more complex than most
models allow for
Problem Recognition:
Problem recognition results when there is a difference between one's desired state
and one's actual state. Consumers are motivated to address this discrepancy and
therefore they commence the buying process.
Product analysis: This method focuses on the purchase and/or use of a particular
product or brand in an attempt to determine what problems a consumer may
encounter in purchasing or using this product.
Problem analysis: This method takes an opposite approach in that it starts with a
list of problems and asks consumers to indicate activities, products, or brands that
are associated with these problems.
Human factors research: This approach looks at the capabilities of humans, and
attempts to design products in light of these capabilities.
Emotion research: Focus groups and projective techniques are beginning to be
used to help us understand the role of emotion in problem recognition.
Generally, a firm will attempt to influence generic problem recognition when the
problem is latent or of low importance and:
1. It is early in the product life cycle.
2. The firm has a very high percentage of the market.
3. External search after problem recognition is apt to be limited.
4. It is an industry wide cooperative effort.
Causes of problem recognition
Problem recognition is a function of the
(1) Importance
(2) Magnitude of a discrepancy between the desired state and an existing state.
Thus, the firm can attempt to influence the size of the discrepancy by altering the
desired state or the perceptions of the existing state. Or, the firm can attempt to
influence the perception of the importance of an existing discrepancy.
Marketers often advertise the benefits their products will provide, hoping that
these benefits will become desired by consumers. It is also possible to influence
perceptions of the existing state through advertisements. Many personal care and social
products take this approach. "Even your best friend won't tell you . . .”or “Kim is a great
worker but this coffee . . .” are examples of messages designed to generate concern
about an existing state.
Information Search:
Seeking Value The information search stage clarifies the options open to the
consumer and may involve.
Once the consumer has recognized a problem, they search for information on
products and services that can solve that problem. Belch and Belch (2007) explain that
consumers undertake both an internal (memory) and an external search.
The implications of this process help develop an effective promotional strategy, and
select which sources of information are more effective for the brand CV.
Two steps of
information search
ALTERNATIVE EVALUATION
At this time the consumer compares the brands and products that are in their evoked set.
How can the marketing organization increase the likelihood that their brand is part of the
consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the
functional and psychological benefits that they offer. The marketing organization needs
to understand what benefits consumers are seeking and therefore which attributes are
most important in terms of making a decision.
The information search clarifies the problem for the consumer by
• Indirect methods:
• projective techniques:
allow a person to indicate what criteria someone else might use
• perceptual mapping:
consumers judge the similarity of alternative brands (often by ranking),
which is processed by a computer to derive a spatial configuration
Purchase decision:
Once the alternatives have been evaluated, the consumer is ready to
make a purchase decision. The process of going to the shop to buy the product, which
for some consumers can be as just as rewarding as actually purchasing the product.
Purchase of the product can either be through the store, the web, or over the phone.
Sometimes purchase intention does not result in an actual purchase. The marketing
organization must facilitate the consumer to act on their purchase intention. The
provision of credit or payment terms may encourage purchase, or a sales promotion such
as the opportunity to receive a premium or enter a competition may provide an incentive
to buy now. The relevant internal psychological process that is associated with purchase
decision is integration.
Do not buy
Ever have doubts about the product after you purchased it? This simply is post purchase
behaviour and research shows that it is a common trait amongst purchasers of products.
Manufacturers of products clearly want recent consumers to feel proud of their purchase,
it is therefore just as important for manufacturers to advertise for the sake of their recent
purchaser so consumers feel comfortable that they own a product from a strong and
reputable organization. This limits post purchase behaviour. i.e. You feel reassured that
you own the latest advertised product.
• After buying a product, the consumer compares it with expectations and is either
satisfied or dissatisfied.
Overview
Once simply a label for a category of software tools, CRM has matured and
broadened as a concept over the years. Today, customer relationship management
generally denotes a company-wide business strategy embracing all customer-facing
departments and even beyond. When an implementation is effective, people, processes,
and technology work in synergy to develop and strengthen relationships, increase
profitability, and reduce operational costs.
Challenges
Tools and work flows can be complex to implement, especially for large
enterprises. While some companies report great success, initiatives have also been
known to fail—mainly owing to poor planning, a mismatch between software tools and
company needs, roadblocks to collaboration between departments, and a lack of
workforce buy-in and adoption.[citation needed]
Tools and Trends
Previously these tools were generally limited to contact management: monitoring and
recording interactions and communications with customers. Software solutions then
expanded to embrace deal tracking and the management of accounts, territories,
opportunities, and—at the managerial level—the sales pipeline itself. Next came the
advent of tools for other customer-facing business functions, as described below.
Perhaps the most notable trend has been the growth of tools delivered via
the Web, also known as cloud computing and software as a service (SaaS). In contrast
with conventional on-premises software, cloud-computing applications are sold by
subscription, accessed via a secure Internet connection, and displayed on a Web browser.
Companies don’t incur the initial capital expense of purchasing software; neither must
they buy and maintain IT hardware to run it on. For these and other reasons, the SaaS
option has proven very attractive, and SaaS applications have garnered a large share of
the market. They are currently its fastest-growing segment. Vendors include:
Salesforce.com, RightNow and SugarCRM.
CRM technology has been, and still is, offered as on-premises software that
companies purchase and run on their own IT infrastructure. Vendors include: Oracle
Corporation, SAP AG, and Amdocs.
In 2009, SaaS represented approximately 20% of all customer relationship
management spending, and continued its trajectory of outselling on-premises software
by a ratio of 3-to-1.
Types/variations
Marketing
Systems for marketing (also known as marketing automation) help the
enterprise identify and target its best customers and generate qualified leads for the sales
team.A key marketing capability is managing and measuring multichannel campaigns,
including email, search, social media, and direct mail. Metrics monitored include clicks,
responses, leads, deals, and revenue. Marketing automation also encompasses
capabilities for managing customer loyalty, lists, collateral, and internal marketing
resources.
As marketing departments are increasingly obliged to demonstrate revenue impact,
today’s systems typically include performance management features for measuring the
ROI of campaigns.
Analytics
Relevant analytics capabilities are often interwoven into applications for
sales, marketing, and customer service. These features can be complemented and
augmented with links to separate, purpose-built applications for analytics and business
intelligence.
Sales analytics let companies monitor and understand customer actions and preferences,
through sales forecasting, data quality management, and dashboards that graphically
display key performance indicators (KPIs).
Marketing applications generally come with predictive analytics to improve
customer segmentation and targeting, and features for measuring the effectiveness of
online, off line, and search marketing campaign Web analytics have evolved
significantly from their starting point of merely tracking mouse clicks on Web sites. By
evaluating customer “buy signals,” marketers can see which prospects are most likely to
transact and also identify those who are bogged down in a sales process and need
assistance. Marketing and finance personnel also use analytics to assess the value of
multi-faceted programs as a whole.
Customer service analytics are increasing in popularity as companies
demand greater visibility into the performance of call centers and other support
channels, in order to correct problems before they affect customer satisfaction levels.
Support-focused applications typically include dashboards similar to those for sales, plus
capabilities to measure and analyze response times, service quality, agent performance,
and the frequency of various customer issues.
Integrated/Collaborative
Owing to these and related factors, many of the top-rated and most popular
products come as integrated suites.
Despite all this, many companies are still not fully leveraging these tools and services to
align marketing, sales, and service to best serve the enterprise and its customers. Often,
implementations are fragmented; isolated initiatives by individual departments to
address their own needs. Systems that start disunited usually stay that way: Siloed
thinking and decision processes frequently lead to separate and incompatible systems, an
incomplete customer view, and dysfunctional processes.
Small Business
Basic customer management can be accomplished by a contact management
system, an integrated solution that lets organizations and individuals efficiently track
and record customer and supplier interactions, including emails, documents, jobs, faxes,
scheduling, and more.
This kind of solution is gaining traction with even very small businesses,
thanks to the ease and time savings of handling customer contact through a centralized
application rather than several different pieces of software, each with its own data
collection system.
In contrast with contact managers, bona fide customer relationship
management tools usually focus on accounts rather than individual contacts. They also
generally include opportunity management for tracking sales pipelines plus added
functionality for marketing and customer service.
As with larger enterprises, small businesses are finding value in online management
solutions, especially for mobile and telecommuting workers.
Social Media
Social media sites like Twitter and Facebook are greatly amplifying the
customer voice in the marketplace, and are predicted to have profound and far-reaching
effects on the ways companies manage their customer relationships. This is because
customers are using these social media sites to share opinions and experiences on
companies, products, and services. As social media isn’t moderated or censored,
individuals can say anything they want about a company or brand, whether pro or con.
Increasingly, companies are looking to gain access to these conversations
and take part in the dialog. More than a few systems are now integrating to social
networking sites. Social media promoters cite a number of business advantages, such as
using online communities as a source of high-quality leads and a vehicle for crowd
sourcing solutions to customer-support problems. Companies can also leverage
customers’ stated habits and preferences to personalize and even “hyper-target” their
sales and marketing communications.
Some analysts take the view that business-to-business marketers should
proceed cautiously when weaving social media into their business processes. These
observers recommend careful market research to determine if and where the
phenomenon can provide measurable benefits for customer interactions, sales, and
support.
Strategy
Choosing and implementing a system is a major undertaking. For
enterprises of any appreciable size, a complete and detailed plan is required to obtain the
funding, resources, and company-wide support that can make the initiative successful.
Benefits must be defined, risks assessed, and cost quantified in three general areas:
• Processes: Though customer relationship management has many technological
components, business processes lie at its core. It can be seen as a more customer-
centric way of doing business, enabled by technology that consolidates and
intelligently distributes pertinent information about customers, sales, marketing
effectiveness, responsiveness, and market trends. Therefore, before choosing a
technology platform, a company needs to analyze its business work flows and
processes; some will likely need re-engineering to better serve the overall goal of
winning, managing, and satisfying customers. Moreover, planners need to
determine the types of customer information that are most relevant, and how best
to employ them.
• People: For an initiative to be effective, an organization must convince its staff
that change is good and that the new technology and work flows will benefit
employees as well as customers. Senior executives need to be strong and visible
advocates who can clearly state and support the case for change. Collaboration,
teamwork, and two-way communication should be encouraged across hierarchical
boundaries, especially with respect to process improvement.
• Technology: In evaluating technology, key factors include alignment with the
company’s business process strategy and goals; the ability to deliver the right data
to the right employees; and sufficient ease of use that users won’t balk. Platform
selection is best managed by a carefully chosen group of executives who
understand the business processes to be automated as well as the various software
issues. Depending upon the size of the company and the breadth of data, choosing
an application can take anywhere from a few weeks to a year or more.
Implementation
Implementation Issues
Adoption Issues
Historically, the landscape is littered with instances of low adoption rates.
In 2003, a Gartner report estimated that more than $1 billion had been spent on software
that wasn’t being used. A contemporaneous AMR Research study found that of 80 large
customers surveyed, 47% had difficulty with end-user adoption, leading to abandoned
projects or unused software modules.
More recent research indicates that the problem, while perhaps less severe, is a long way
from being solved. According to a CSO Insights less than 40 percent of 1,275
participating companies had end-user adoption rates above 90 percent.
In a 2007 survey from the U.K., four-fifths of senior executives reported that their
biggest challenge is getting their staff to use the customer relationship management
systems they’d installed. Further, 43 percent of respondents said they use less than half
the functionality of their existing system; 72 percent indicated they’d trade functionality
for ease of use; 51 percent cited data synchronization as a major issue; and 67 percent
said that finding time to evaluate systems was a major problem. With expenditures
expected to exceed $11 billion in 2010, enterprises need to address and overcome
persistent adoption challenges. Specialists offer these recommendations for boosting
adoptions rates and coaxing users to blend these tools into their daily work flow:
• Choose a system that’s easy to use: All customer relationship management
solutions are not created equal. Some vendors offer more user-friendly
applications than others, and simplicity should be as important a decision factor as
functionality.
• Choose the right capabilities: Employees need to know that time invested in
learning and usage will yield personal advantages. If not, they will work around or
ignore the system.
• Provide training: Changing the way people work is no small task, and help is
usually a requirement. Even with today’s more usable customer relationship
management systems, many staffers still need assistance with learning and
adoption.
Provide consistent support. Prompt, expert, always-accessible technical support goes a
long way to facilitate use and confidence with a new system.
The following table lists of the top software vendors for CRM projects completed in
2006 using external consultants and system integrators, according to a 2007 Gartner
study.
Case Study
Levi strauss & Co.
The marketer has to learn about the needs and changing of the consumer behaviour and
practice the Marketing Concept. Levi strauss & Co. were selling jeans to a mass market
and did not bother about segmenting the market till their sales went down.
The study into consumer behaviour showed their greatest market of the baby boomers
had outgrown and their NEEDs had changed. They therefore came out with Khaki or
dockers to different segments and comfortable action stocks for the consumers in the 50
age group. Thus by separating the market and targetting various groups and fulfilling
their needs, they not only made up for the lost sales but
far exceeded the previous sales. They also targeted the women consumers for jeans and
both men and women started wearing jeans in greater numbers. The offering given by
the company must be enlarged to suit various segments.
Maruti Udyog
For example Maruti Udyog Ltd has come out with many models. Maruti 800,
Maruti Van, Zen, Alto, Veagon R, Versa Gypsy, Esteem, Boleno and other models.
For successful marketing one should:
1. Find consumer needs of various segments.
2. Position Products (new & existing) to these segments.
3. Develop strategies for these segments. Practice greater selectivity in
advertising and personal selling and creating more selective media and
distribution outlets.
Consumer perceptions on the incorporation of established brands : The acquisition
of Body Shop by L’Oréal
Nowadays, firms are becoming more and more global. However, are consumers
becoming global too? Therefore, the challenge for the firms consists in determining if
they should adapt their products or if they should consider the consumers as being
global, and keep their product standardized.
The purpose of this paper is to investigate adaptation strategy in South Korea, Japan and
People’s Republic of China (PRC) for make-up products and its promotion considering
the influence of culture on the consumer behaviour. This is studied referring to the
European market. L’Oréal Paris is used as an example to illustrate the study.
This study is a case study about L’Oréal Paris. To conduct it, we chose to use qualitative
interviews and document analysis. Different kinds of interviews have been done in order
to know more about the company adaptation strategy, the culture and the consumer
behaviour in Asia. Written sources as external documents from L’Oréal Paris, websites,
press articles, scientific articles and literature have been used to complete the primary
data.
Culture is a system of meanings shared by members of a group. It is an important part of
marketing because it influences the consumers’ wants and needs and because it impacts
on the interpretations of products’ communication. This demonstrates that the culture
impacts consumer behaviour. The study of the consumer behaviour conducts companies
to adapt their products features, their packaging, their symbolic attributes, their service
attributes and their promotion.
The empirical data comes from various sources. We interviewed three managers from
L’Oréal Paris and as well girls from the following nationalities: three Japanese girls, one
Chinese girl and two Korean girls. We also interviewed a specialist of cosmetics. All
these interviews were conducted in order to answer our objectives. The interviews with
the Asian girls and with the specialist of cosmetics were conducted in order to collect
data on the culture and on the consumer behaviour. The interviews with the managers of
L’Oréal Paris were conducted in order to collect data on their adaptation and
standardization strategies on the studied markets.
Cultural aspects impact directly or indirectly on the consumer behaviour. The culture
diversity creates the consumer behaviour diversity as it can be noticed in South Korea,
Japan and PRC where the culture and the behaviours are very different than in Europe.
L’Oréal Paris is trying to know more about these consumer behaviour differences in
order to answer the consumers’ demands and to adapt its products and promotion
strategy.
L’Oréal Paris is adapting some elements of its product range and its promotion. The
three countries studied are very different culturally speaking. However, the adaptations
on products and promotion made by L’Oréal Paris do not take fully into account these
cultural and consumer behaviour differences. Moreover, many promotion and products
aspects are standardized. Thus, the L’Oréal Paris adaptation strategy in the Asian zone is
a mix between standardization and adaptation. In its adaptation strategy, the firm
considers some elements of the consumer behaviour therefore of the culture. To
conclude, the cultural differences may influence the make-up products and promotion
adaptation strategy.
Practice what you preach!? : A study of the gap between attitude and behaviour
towards organic milk
The trend of environmentally friendly consumption permeates our whole society and the
general attitude towards the consumption of it is strongly positive. However, the
existence of an attitude-behaviour gap became clear to us since the actual green
consumption does not reflect the positive attitude. In this thesis focus is on one specific
product - organic milk. Therefore, the purpose of this thesis is to explain the dissonance
between attitude and behaviour towards organic milk. In order to reach our purpose we
chose to perform a pilot study targeting students at the University of Linkoping. Both
qualitative and quantitative methods have been used in the collection of data. It has been
done using a survey and interviews. We were able to establish the existence of an
attitude-behaviour gap towards organic milk amongst students at the university, and that
this gap in fact arises before an intention to buy organic milk is even formed. Since a
behavioral intention is not formed, an actual corresponding behaviour will not occur.
The attitude-behaviour gap is explained by the fact that other factors than attitude
influence the formation of the intention. In this case the factors strongly counteracting
the attitude are consumer habits, social influence, to what extent the consumer feels an
ethical obligation to buy organically and whether the consumer identifies herself with
the issue. Together, these factors are so strong that they succeed in neutralizing the
positive attitude.