How Ford Motor Company Utilises The Marketing Mix To Influence Consumer Buying Behaviour - Essay Example

? How Ford Motor Company utilises the marketing mix to influence consumer buying behaviour BY YOU YOUR SCHOOL INFO HERE HERE TABLE OF CONTENTS Introduction................................................................................................................. 2. Hierarchy of effects..................................................................................................... 3. Memory processing and attention................................................................................ 4. The decision-making process....................................................................................... 5. Additional marketing mix elements leading to purchase and loyalty.......................... 6. Conclusion.................................................................................................................... References How Ford Motor Company utilises the marketing mix to influence consumer buying behaviour 1. Introduction Ford Motor Company recently celebrated its 110th birthday and currently maintains the status of fifth largest automaker in the world in terms of total auto sales (Schmitt 2011). Ford sustained revenues of $134.3 billion USD in 2012, supported by the sale of 5.53 million automobiles across the world (Ford Motor Company 2013). Ford maintains one of the most recognised brands in the world, creating brand recognition with historical emphases on quality and innovation. Currently, Ford is positioned under quality, with marketing emphasis on product in the marketing mix, utilising integrated marketing communications to give consumers the perception of product excellence, superiority and performance. Fortunately, global consumers’ having a high level of awareness of the brand makes it more simplistic for Ford to work on higher order aspects of marketing to build loyalty to the brand without having to concentrate on building brand recognition. “Ford is producing cars that critics and consumers are raving about” (Ritson 2010, p.2). However, how is the company able to establish positive perceptions about the brand and satisfy consumers so effectively to create such frenzy? This paper seeks to provide an explanation for how Ford builds brand loyalty toward the Ford brand. Various models of consumer behaviour serve to provide the necessary answer to this question. 2. Hierarchy of effects A considerable volume of consumer shopping behaviours are controlled in the subconscious and are not driven by cognitive awareness. In most consumption scenarios, “consumers are unaware that they are driven by motives” (Blackwell, Miniard and Engel 2006, p.216). This can complicate the process of building brand connection with consumer segments as consumers cannot always provide rational statements as to why they prefer one product over another. Because of this unconscious processing of consumer segments, it becomes increasingly important for marketers to understand the factors that assist in creating attitudes about a brand and what influences consumers about what brands to purchase. With a large amount of consumption behaviours being driven by instinctive or involuntary judgments, marketers must understand the factors associated with memory and cognition to create relevant and accepted promotional campaigns that build a more positive brand reputation. Figure 1: Hierarchy of Effects Model Source: Pauley Creative (2013). Hierarchy of Effects Model. http://www.pauleycreative.co.uk/2010/10/social-product-marketing-for-product-manufacturers-in-the-construction-industry/ The Hierarchy of Effects model indicates that consumers first build awareness and knowledge of the brand. The model illustrates that consumers go through a structured process that dictates how the consumer ultimately responds to marketing communications and brand, which is based on what they feel, think and perform (Pomoni 2010). The model illustrates that knowledge leads to linking and brand preference, ultimately allowing marketers to reward consumers for having conviction (preference) for the brand which ultimately influences a final purchase decision. It allows marketers to overcome the various psychological obstacles regarding consumer behaviour that strongly influence whether a company can establish brand loyalty and influence consumers to make a single or recurring set of purchases. 3. Memory processing and attention The most respected model of memory processes involves three stages: encoding, storage and retrieval. Encoding involves the process of converting various stimuli into a construct that is stored in short- or long-term memory. Once stored, consumers can retrieve this information as a response to a particular cue. (See Figure 2). Figure 2: The Memory Process Model The encoding process in memory is one of the most critical aspects of human behaviour that is relevant and important to marketers. The degree to which memories are encoded depends on a consumers’ previous experience with the stimulus or phenomenon (Cameron 1999). What does this mean exactly? A consumer that has been given a certain brand of snack whilst in an environment with crying children might result in a memory that is largely negative. However, when given the same snack brand in a social environment with good friends, the memory may be encoded more positively which creates unconscious, favourable memories about the snack brand. Consumers are not often aware of the values and needs that drive their motivations (Blackwell et al. 2006). This means that knowledge and awareness will not always lead to liking and preference which could have significant implications for companies attempting to build brand loyalty. The depth and quality of previous experiences with a stimulus are critical dimensions to whether a company can build positive brand preference and loyalty. This is true because the methods by which memories are retrieved and utilised are highly dependent on previous experiences with a certain stimulus (i.e. brand experiences). As offered by the domain of psychology, encoding is impacted by a phenomenon referred to as constraint theory. This theory indicates that consumers maintain unconscious bias in which consumers maintain a tendency to block out information in the learning process that is deemed irrelevant or unrelated to their value systems (Desforges and Lings 1998). When stimulus is deemed immaterial to the consumer, they shut out the information which “helps to impose order on chaos” (Markman 1990, p.62). According to Schiffman and Kanuk (2010) values are highly relative and are subjective related to a consumers’ perceived benefits of a stimulus (or brand) and the resources required to obtain the benefit. Recognising consumer bias under constraint theory is paramount to creating relevant promotional materials and integrated messages that will be deemed significant and valuable as it relates to consumer value systems. Failure to create messages or imagery that will be deemed worthy to consumers will be blocked out and not encoded for storage into memory. The tendency of consumers to dismiss giving a marketing message attention will have significant ramifications for whether the consumer reaches the liking and preference stage along the Hierarchy of Effects model. Take, for instance, a consumer that believes top quality vehicles are the foremost imperative for consumption. If the marketer utilises lifestyle marketing in advertisement and attempts to appeal to the social environment, constraint theory indicates that the consumer will block out these messages in the pursuit of receiving fulfilment of quality expectations; perhaps by defecting to another competing brand that provides more relevant stimuli. This phenomenon is linked with perception, under the theory of cognitive dissonance, which offers that consumers often have incongruence between their values and attitudes and the level to which they hold conflicting beliefs about an object (Bose and Sarker 2012). Whereas the consumer once held strong convictions about the importance of quality when making vehicle consumption decisions, they now experience cognitive dissonance which creates negative perceptions about the brand since the brand did not provide relevant and acceptable messages about quality; instead trying to appeal to aspirational reference group mentality. Figure 3 illustrates how cognitive dissonance and consumer bias can develop. Figure 3: Personification of product for social appeal Source: Coloribus (2010). Ford Mustang “It’s Back” Print Ad by Team Detroit. http://www.coloribus.com/adsarchive/prints/ford-mustang-its-back-15798355/ Figure 3 illustrates how Ford attempts to personify the product, thereby giving it a personality. This advertisement fails to provide any meaningful imagery or messages that reinforce quality. Under constraint theory, it is likely that the consumer with a propensity to strongly value quality will simply block out this message and, subsequently, develop unfavourable emotions about the brand. Integrated marketing communications must, therefore, be made relevant to the values and needs of various consumer segments or run the risk of complicating the memory encoding process that will lead to long-term negative brand perceptions. This ties in closely with the concept of perception in the consumer decision-making model, whereby attitudes about brands are strongly influenced by stereotypes (Schiffman and Kanuk 2010). A quality-focused consumer will maintain favourable impressions about brands that provide promotions and communications that focus on this aspect of product excellence. A more effective encoding experience, whereby positive brand liking is developed, will appeal to these stereotypes (See Figure 4). Figure 4: Quality-focused advertising Source: Wowza Magazine. (2012). Ford Octogrip Campaign. http://www.wowzamagazine.com/component/k2/item/127-ford-octogrip-ad-campaign Consumer segment with enduring quality stereotypes will be more attracted to this type of communication from Ford as it speaks to performance and excellence in product. The OctoGrip campaign illustrated in Figure 4 shows that the company believes in quality which will allow the consumer to encode the information more positively, creating brand liking and perhaps even brand preference if the marketer is consistent with these types of targeted promotional messages. They are likely to give the advertisement more attention and build a positive perception about the brand because now the brand appears to be linked with enduring values held by the consumer segment. Figure 5 illustrates how a brand can create cognitive dissonance within the consumer, where values are at odds with cognitions that were created by producing non-relevant promotional materials. Figure 5: Lifestyle marketing methodology to appeal to social way of life. Source: Rapoza, K. (2013). Ford India apologises for advertisements it never ran, Forbes Magazine. [online] Available at: http://www.forbes.com/sites/kenrapoza/2013/03/25/ford-india-apologizes-for-advertisements-it-never-ran/ The quality-centric consumer would likely reject the content of this type of advertising that is developed utilising a psychographic approach. It speaks nothing of quality, but instead depicts a more aspirational social environment that would only be relevant to consumers that would find value for lifestyle enhancement by the brand. The message of this advertisement in Figure 5, Leave your worries behind, is irrelevant to those who make consumption decisions related to quality and product. Little attention would be given to this type of advertisement, encoding the memory with minimal positive attitudes, diminishing the liking and preference of the brand. Hence, all of the promotional examples provided illustrate how companies utilise the marketing mix as a means of gaining consumer attention and loyalty. Ford recognises that many consumer markets are looking for high performance and quality products and attempts to create integrated messages and promotions that will attract attention and enhance perceptions of the brand. Once the company understands (through research) that the majority of its most viable and profitable consumer segments value quality, any communications that attempt to appeal to social factors or lifestyle factors are likely to be dismissed and not encoded to memory with positive associations. By positioning the brand under quality focus, cohesive and unswerving messages linked to quality will more rapidly advance the stages which the consumer moves through in the Hierarchy of Effects model and build faster brand loyalty than that of competition. Figure 6 illustrates a promotional campaign for the Ford Fiesta with an emphasis on product, however communications indicate no focus on quality, but on the psychological impact of driving this particular model. Figure 6: Socio-psychological advertising with emphasis on product. Source: AutoEvolution. (2012). New ad campaign for 2011 Ford Fiesta. http://www.autoevolution.com/news-image/2011-ford-fiesta-ad-its-a-pretty-big-deal-video-20542-1.html The same quality focused consumer segment would indeed witness the product (i.e. design and colour), but would have no indication of why this product speaks toward Ford quality. Again, as with other promotional examples provided, the consumer would likely reject this message and liking along the Hierarchy of Effects model would be reduced. Retrieval of memories associated with viewing this promotional material could be associated with negative connotations related to their value systems and consumption behaviours. Only certain segments that share values related to social celebrations would find this information relevant and therefore commit it to memory with positive brand associations. 4. The decision-making process Consumers go through five stages in the decision-making process. It begins with need recognition, followed by a search for information, an evaluation of alternatives, a final purchase decision, and ultimately post-purchase evaluation (Wells and Prensky 1996). Consider a consumer that requires a high performance truck to improve workplace productivity. They are going to recognise a need for a quality truck and begin a search for information about available options and product-related benefits. It is the next stage, evaluation of alternatives, where marketers must be concerned with consumer perception and memory processing. If the consumer searches online and in other media mediums and identifies advertisements from truck manufacturers that appeal to lifestyle and social scenarios, they will likely make a final purchase decision for companies that have a quality focus in their integrated communications. Even though Ford produces top quality and high performance trucks, the company failed to create relevant promotions which caused the consumer to draw on their pre-existing biases and stereotypes, thereby causing the consumer to reject Ford as a viable consumption option. This is linked with the means-end chain in marketing, an explorative model that examines the potential connections between consumer and product. Products serve as catalysts (means) by which consumers seek attainment of their values (ends) as a means of satisfying their ultimate needs (Assael 1998). See Figure 6. Figure 6: Quality Focused Promotions Source: Benjamin Media. (2011). Two new V6 engines dominate Ford F-150 sales. http://www.ceunbound.com/index/siteblog-post-action/id.917/title.two-new-v6-engines-dominate-ford-f-150-sales-video In the case, again, of the quality-focused consumer, the functional consequences are more important than the psychological consequences. Key terms such as most torque and best fuel economy serve to satisfy the consumer. However, consumers that are more concerned about the psychological consequences of consumption might reject this type of quality-centric promotion in favour of another campaign that explores how social status can be enhanced through Ford products. A consumer that recognises a need for social belonging, along Maslow’s Hierarchy of Needs model, might be more attracted to the aspirational peer reference groups and celebrities sharing desirable traits as they are more aligned with needs and values. Decision-making occurs as a result of liking the brand, finding personal connection with the brand as it relates to lifestyle and values, and the extent to which the marketer provide relevant and meaningful communications aligned with their specific needs. 5. Additional marketing mix elements leading to purchase and loyalty It is not always product in the marketing mix, as with Ford, that appeals to a larger majority of consumers. Pricing can be utilised as a selling point, something that provides considerable liking of the brand if it meets the consumer’s price sensitivity. Pricing may be the main decision-making catalyst and would therefore be more influenced by pricing promotions of various auto manufacturers. If the consumer recognises they need an affordable car, searches alternatives and finds value in price promotions and advertisements focusing on low pricing structures, they will be more drawn toward the low price brand. In this case, as linked with consumer behaviour theory, the price-focused consumer would find no dissonance between their values of affordability and the marketing entity’s promotion of price as a primary selling tool. If the consumer perceives that the pricing is unfair or too high, it can reduce liking and preference of the brand which will, ultimately, not lead to long-term brand loyalty. Place can also be an imperative, especially for consumers that value convenience in the auto shopping experience or personalised service dimensions that enhance the shopping experience. Some automakers, including Ford, utilise advertising that illustrate proximity with such slogans as “Your 31 Metro Ford Dealers – Think Ford First!”. This builds attention for consumers that do not want to travel distances to shop for cars and reminds them that, due to convenience in place, they should put Ford into their minds as a primary alternative for consumption. This would appeal to the consumer in this category with a specific, convenience need to encode the message positively and the potential psychological consequences would be the primary ends that satisfy needs fulfilment. The local dealership serves as the means by which these values have been fulfilled and, through promotional targeting to this behavioural segment, the brand removed cognitive dissonance and built a more positive liking toward the brand that ultimately leads to a final purchase decision for Ford over that of competition. 6. Conclusion As illustrated, companies must understand what drives consumer decision-making processes, memory processes, and the specific, enduring values that drive consumers to recognise they have a need. Once this need is identified, the marketer must understand how consumer attention is given to various elements of the marketing mix (especially promotion) and how it will be encoded as either a positive or negative experience or stimulus. By understanding consumer characteristics and behaviours, an effective emphasis on certain dimensions of the marketing mix can enhance purchase decision-making and long-term loyalty to the brand. If the consumer is price sensitive, price promotions are effective. If consumers value quality, then performance and benefits should be emphasised. If consumers want convenience, geography of distribution should be emphasised in marketing communications. However, based on the literature associated with memory, consumer behaviour, perception and attention, the marketer must understand what drives consumer needs (coupled with values knowledge) and then utilise the 4Ps effectively to gain consumer interest and preference toward the brand. References Assael, H. (1996). Consumer behaviour and marketing action, 5th edn. Cengage South-Western. Blackwell, R., Miniard, P. and Engel, J. (2006). Consumer Behaviour. Mason: Thomson South-Western. Bose, T.K. and Sarker, S. (2012). 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