Consumer Behaviour Models and Their Strategic Applications - Essay Example

 Consumer Behaviour Models and Their Strategic Applications Introduction Consumer behaviour is study of groups, individuals, organisations as well as processes as they secure, select, use and dispose services, products, ideas or experiences in order to satisfy their needs (Engel, 1998). Various theories of consumer behaviour have been identified by researchers. In the current report, four consumer behaviour theories have been identified and described. The report has evaluated successful usage of the above theories by four different brands as well as the important roles played by these theories in order to create successful perception and brand image among their respective target segments. Pepsi and Low Involvement Decision Making With the advancement of technology, it has become easier for consumers to search for necessary information and make careful and informed decisions. This theory was first mentioned by Walters (2002), where he had considered all the external and internal factors affecting the purchase decision of an individual and created a complex connection. Group as well as social forces influence the buying process of a customer. Consideration of research work of Krugman and Hartley (1970) reveals the fact that there is significant amount of divergence exist peoples involvement in the decision making process. In some decision making process, people pay significant amount of importance on evaluating available options while in case of some products, consumers do not put significant importance on evaluating options and just go by their intuition. In first case, the decision making process is known as high involvement decisions while the second process known as low involvement decision process. What exactly meant by these two terminologies? The question can be answered by using the psychological aspects of decision making process. Some decisions such as career choice, buying house, buying car, educational degree, getting married etc are very important because affect aspects of our life. Therefore, people tend to involve more while making decisions regarding above mentioned issues. On contrary, decisions regarding fast food purchase, buying drinks, buying small products etc can affect customers only during specific period of consumption and such decisions can hardly impact overall aspects of human life. Therefore, people tend to involve less while making decisions regarding above mentioned issues. In Low Involvement Decision Making, people can make purchase decision with the help of specific stimulus such as positive feelings during consumption, suggestion from peer group, consumption environment, previous consumption experience etc. Involvement based Consumer Decision Making Process In this section, the study will use Pepsi’s marketing and promotional efforts in order to understand how Low Involvement Decision Making takes place while consumers make soft drinks purchasing decision. From marketing perspective, Pepsi’s marketing and promotional efforts aim to persuade consumers that they are better compared to Coke. Pepsi uses TV commercials. Print advertisements, celebrity endorsements, sports events sponsorships, music event sponsorships, retail promotions which are tailored for the local market, in store displays, bill boards, hoardings, social media advertisements in Facebook, Twitter etc to promote their offering (Aronson, 1999). Aronson (1999) stated that market share of Pepsi is smaller than Coke but in the last 14 years, Pepsi has regained its market share with the help of the promotional strategies. Now, when customers make soft drinks consumption decision then what factors they exactly consider? Making soft drinks consumption decision or selecting between soft drinks brand such as Coke and Pepsi can engage customers only during the consumption period and has very negligible impact on overall course of life of customers. Therefore, making soft drinks consumption decision or selecting between soft drinks brand such as Coke and Pepsi can be classified as Low Involvement Decision Making. In Low Involvement Decision Making process, in the first phase, consumers identify the need of having soft drinks. In the second phase, they show the intention to purchase soft drinks of Pepsi or Coke. In the third phase, people make choice between Pepsi and Coke on the basis of their previous consumption experience, friend suggestions, and influence of commercial promotions of both the brand and biased preferences. After consuming the soft drink item, people tend to evaluate their purchasing decision in terms of money they have paid as against taste based satisfaction they got from consumption. In such context, Pepsi has located online destinations such as, Sound off and Pulse, where visitors are encouraged to comment on a TV show sponsored by Pepsi. In order to capitalise its presence in other networking sites such as, Twitter, Pepsi has also initiated online concerts, which includes song selection of well-known artists. Customers take help of such non-personal stimulus being offered through advertisements of Pepsi while making the purchasing choice which is basically a Low Involvement Decision Making process. McDonald’s and Elaboration Likelihood Theory Elaboration model is based on individual’s attitudes. Attitudes are measured as lasting evaluations of issues, objects or individuals, thereby guiding behaviour. While theorists have questioned the specific relationship between behaviour and attitudes, marketing practitioners treat positive attitude theory or positive behaviour towards a product or brand as an indication towards positive behaviour like, sales of the product or brand. Based on the above concept, organisation spends huge resources in order to create positive customer attitude towards the organisation’s offering. According to the model, there are two routes for persuasive influence; peripheral and central. The key element in this method is involvement. Elaboration involves varying cognitive processes such as, recall, evaluation, inferential and critical judgement. The most fundamental applications of ELM are through reader experiments elaborating persuasion such as, mobile texts, brand recall, providing credibility of the source and questionnaire surveys (Sher and Lee, 2009). McDonald’s has used the applications from this model in order to target its customers and develop persuasive communication theories. One of the most critical parts of McDonald’s communication strategy is to know its target market. As different consumers react to the same message in different forms, the company should ensure that their messages are not misinterpreted by any target segment. In case of McDonald’s, the target market is segmented on the basis of age, nutritional attitudes, dietary practices as well as eating behaviours. Based on the perspective of ELM, McDonald’s have implemented the strategy of examples and statistics in order to increase persuasion among its target consumers. In case of health-conscious consumers, the fast food chain focuses on evidences and arguments while creating the message. However, in case of customers who are less capable and motivated to understand various health issues, focus is given more on superficial message aspects. The messages in McDonald’s health campaigns use sources with dimensions such as, trustworthiness and expertise. This strategy is confirmed though previous research studies where consumers consider doctors and dieticians as credible sources. The promotional strategy of McDonald’s has been designed specific to the segmented target groups. For example, for health-conscious consumers, the company offers healthy meal packages with salad at a cheaper price. The pricing is especially to attract existing customers to switch their habits to healthier food. This lower pricing strategy was created to reinforce the customer to consume healthier food. For customers who were less interested in healthy foods, especially youngsters and teenagers, free sport coupons were distributed. According to this promotional plan, customers who are visiting McDonald’s for the fifth time will get free coupons for swimming clubs (Dash, 2005; Holbrook et al., 1984). Harley Davidson and Behaviour learning theory The behaviour learning theory relates to the principles of learning, where the focus is not on the various processes inside a customer. The objective is to focus on the relation between stimuli and the response of the customer. It identifies the procedures through which individuals undertake the decision process of purchasing a service or product or not. This theory is based on various assumptions. In order to understand the learning process, focus should be on responses and stimuli. Occurrence of behavioural changes evidences a learning process. It also assumes that learning is the result of various environmental events. The two major types of learning in this behaviour theory are classical conditioning and operant condition. Classical conditioning addresses involuntary responses which operant conditioning address voluntary responses. Positive as well as negative reinforcement related to product and service offerings results in positive or negative customer behaviour. The various buyer characteristics which influence the purchase decision include motivations, attitudes, personalities, perceptions and lifestyle. Thus, marketers are always trying to tap this information about the current as well as potential customers. The inputs are processed in the model; the responses of the buyers are manifested in the form of various decisions regarding dealer choice, product choice, purchase frequency and quantities of purchase. In a nutshell, the various inputs related to consumer behaviour in terms of data and information is converted into optimal output, thereby helping in growth and sustainable development of a product or brand. This is a classical conditioning approach which is used by marketers to persuade customers towards a certain offering. It is thus, used to identify those marketing practices which have the highest probability of yielding optimal results (Hawkins, Best and Coney, 1998). Learning Theory Behaviour learning theory is used in marketing strategies as marketers need to find out a way to change a stimulus into positive responses inside the customer’s mind. Marketers of Harley Davidson spend a great amount of time and resources analysing and evaluating consumers and their specific buying behaviour. Their major aim is to understand their customers completely. An average Harley rider is 46 years old, working husband with a median to high household income. Also, around 10 percent of the bike purchases are done by women. In order to understand the characteristics of buyers, Harley conducts focus group surveys. Thus, through constant observation, they are able to evaluate the behavioural patterns of their target customers and locate appropriate and strong positions to influence their life and gain brand loyalty. These include formal meetings of Harley club members as well as participation in various internal discussion groups (Corporate Design Foundation, 2013). In order to relate the brand with its consumers, Harley Davidson uses stimulus generation strategy through establishing owners’ club for Harley riders. The origin identity of the brand never changes, so that brand association is always intact. The brand association is reinforced with the help of partnership with various action movies such as, Terminator II and Easy Rider. The brand had also started informal meetings which were held by Harley fans. In order to add social slant to the already rough biker image, the brand associated itself with Muscular dystrophy foundation and also, holds various events to promote charity. As of now, this has become a trend where owners conduct rides and rallies for various charity works. This has not only increased the purchasing behaviour but has also influenced the overall brand loyalty towards Harley. Thus, through proper conditioning, positive reinforcement strategies as well as emulating their attitudes and behaviours, Harley was able to create a niche leadership in this segment. Nike and Cognitive Dissonance Theory Theory of Cognitive Dissonance was first developed by Leon Festinger. According to this theory, inconsistency between the attitude and actual behaviour of an individual causes an uncomfortable psychological dissonance (Hamza and Zakkariya, 2012). This in turn motivates the person to engage in various activities that help in minimising the dissonance. This theory has found its applications in various research fields. Research has suggested that a post-purchase dissonance influences the post-purchase satisfaction in a negative manner. Post-purchase decision is quite normal as purchase decisions generally require a bit of compromise. There are various factors that affect cognitive dissonance. Individuals tend to be steady in their perceptions and beliefs. Incongruity between behaviours and beliefs results in dissonance. Various elements responsible for giving rise to cognitive dissonance are attitudes, beliefs, customers, values, political philosophy, emotional reaction, culture, norms, influence from peer groups and regional values (George and Edward, 2009). Nike is undoubtedly one of the best known brands which create advertisements that challenge the fundamental concepts in everyday life. According to Nike’s latest brand motto, if a person has a body, that individual has to be an athlete. Thus, Nike is going against the normal attitude and perception which implies that not everyone can be an athlete. Through this, they have also increased their target market base to practically everyone. Measuring cognitive dissonance is a critical factor in product industry. Marketers should be ready to take all necessary steps required. Even though Nike advertisements cause dissonance among public, they are able to turn this dissonance into successful marketing tactic, thereby sending positive message among existing as well as potential customers. Cognitive dissonance has been extensively used by Nike in its advertisements. The amount of information received by consumers in daily lives through advertisements is huge and this information is generally inconsistent. As a result, dissonance exists in their daily lives and they are in continuous effort for reducing these dissonance. Cognitive dissonance is can be either pre-purchase or post-purchase. For example, Nike has used guilt in its advertisements. It is based on the view that people might feel incomplete as they do not posses certain product or service which is being advertised. The first advertisement from Nike that targeted women was introduced in 1991. In this advertisement, women were compelled to think and feel for themselves and be their own ideal. Since it was targeted at women for the first time, the ad was made to make women feel that they were capable and important in every aspect, just as the men. Through this campaign, the company also grabbed a new target segment. Another application of cognitive dissonance is in cause-related field of advertisements. Here, certain ideas and issues which are generally not overtly expressed in the society are confronted as well as accepted. The major motivation behind creating such dissonance is to get customers and individual into thinking about those topics on which they are generally neutral (Malhotra, 2005). Nike has successfully used cognitive dissonance theory during the campaign, “Strong is beautiful”. This campaign was established with the motive of sending the message that women can be beautiful even if they are not perfect. According to research, it was realized that most of the women across the globe hated something about their body. The media has always shown that beauty can be accepted only in forms of size zero models. However, Nike came up with youth athletes spreading the message that it is alright to build muscle and work hard. Thus, through cognitive dissonance, the company was able to generate positive brand image. Conclusion Consumers are the focal point in any organisation. Studies regarding consumer behaviour have always been critical and a determining factor for making strategies for marketing, advertising and promotions. Researchers and marketers alike have been analysing and evaluating strategies on the basis of various consumer behaviour theories. From the above study, it has been found out that consumer behaviours are the fundamental points shaping attitudes and perception of customers. The cognitive dissonance theory is used by marketers to create positive dissonance and high brand equity among consumers. It also suggests that social and cultural factors play an important role in consumer decision making process. Thus, marketers will have to capitalise on the social, cultural as well as cognitive aspects of consumer to create a positive decision making process towards the brand. Reference List Aronson, E., 1999. The social animal (8th Ed.). New York: Worth Publishers. Corporate Design Foundation. 2013. Harley-Davidson: Marketing an American Icon. [online] Available at: [Accessed 6 December 2013]. Dash, K., 2005. McDonalds in India. Thunderbird: The Garvin School of International Management, 1, pp. 1-25. Engel, J. F., 1998. Consumer Behavior. Oxford shire: Blackwell George, B. P. and Edward, M., 2009. 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J. and Lee, S., 2009. Consumer skepticism and online reviews: An elaboration likelihood model perspective. Social Behavior and Personality, 37(1), pp. 137-144. Walters, D., 2002. Operations Strategy. Basingstoke: Palgrave Macmillan. Read More