Consumer Behavior Analysis - Case Study Example

Consumer Behaviour Current Background Business firms can become too focused on promoting the merits of their brand and their product and in doing so, do not have a pulse on consumer attitudes and perceptions of the brand and the product. In order for any business to succeed it needs to be fully appraised or accurately appraised of what consumers think, feel and want not only in relation to the firm’s product and brand, but generally. It will therefore be necessary to measure and assess consumers’ attitudes, perceptions and preferences. Radian6 offers a method for conducting this exercise by tracking customer conversations and blogging via the internet (Radian 6, 2011). Case Issues Management needs to make on-going decisions relative to what changes need to made in response to consumer behaviour in the context of the products that they offer. These decisions need to be made on the basis of an understanding of consumer behaviour. This understanding will inform of the appropriate action for improving sales or withdrawing the product altogether, depending on what firms’ know about or learn about consumer behaviour, perceptions, attitudes and desires. If management decides to respond by improving or changing the brand or product, once changes have been made, management will have to track consumer reaction and perceptions of the changes. Radian 6 offers a range of tools for integrating online social networking in a single place so that consumer behaviour, attitudes and perceptions as well as preferences can be accessed at one location. In other words, Radian 6 facilitates a method by which conversations among consumers can be analysed. Management may also communicate directly with consumers. Radian 6 (2011) explains that it a “platform” for listening, discovering, measuring and engaging “in conversations across the social web”. Case Analysis Radian 6 taps into consumer behaviour which is a generalization of marketing theory. Consumer behaviour as a general marketing theory places the consumer “at the centre of the marketing concept” (Baker and Saren 2010, p. 42). Essentially, consumer behaviour by itself provides an array of theories that can unlock the door to understanding consumer behaviour. Consumer behaviour as a general theory combines core concepts such as culture theory, economic, political, consumer information, services and cognitive psychology based theories (Baker and Saren 2010, p. 42). These core concepts were once used for analysing four factors, commonly referred to as the four Ps: product, price, place and promotion impacts in the market (Passikoff 2006, p. 2). With the help of communication technologies, marketing management are tapping into three factors known as the three Cs, which are now taking the place of the four Ps: customer engagement, customer expectations and customer loyalty (Passikoff 2006, p. 2). In recent times organizations have been focusing more on social media as an outlet for understanding consumer behaviour (Evans and McKee 2010, p.4). Evans and McKee (2010) explain the social explosion that had led to cultural changes and thus new approaches to marketing theory relative to consumer behaviour. According to Evans and McKee (2010): Given the visible impact of web 2.0 in marketplaces around the globe – or more correctly, the marketplace of the globe – social technology is now considered a “given” in business (p. 3). The social media and social network facilitate a method by which management can look into the hearts and minds of consumers. Evans and McKee (2010) explain that marketing managers are now able to “connect with and prosper through collaborative association with its customers” (p. 4). This marketing research technique is generally regarded as benefiting from “social capital” (Hunt 2009, p. 8). Social capital is found in the marketing intelligence that can be extracted from social networking. Churchill and Lacobucci (2009) explain that “social networks are everywhere” (p. 2). Users are communicating with one another. Users are providing and exchanging “tips” for “troubleshooting electronics”; new mothers are making recommendations for “baby products” (Churchill and Lacobucci 2009, p. 2). Consumers are logging on to the internet and are communicating about a variety of products and brands offering a valuable source of feedback. Likewise, consumers are able to gain access to samples online for testing products. According to Churchill and Iacobucci (2009): Thus, new product concepts are easily tested, as are comparison among competitive product offerings and their attributes (p. 2). The advances in technology provide consumers with a valuable tool via the Internet for sharing their perceptions, attitudes and perceptions relative to products in a way that was not previously possible. Business can obtain timely feedback and can monitor changes in consumer attitudes, perceptions and preferences more efficiently and effectively. Businesses can join in the discussions online and by doing so may create “an internal source of information that marketers can analyse to help improve marketing decisions” (Pride and Ferrell 2009, p. 77). Pride and Ferrell (2009) report that 77 per cent of consumers refer to online customer review before making a purchasing decision. Therefore companies can use online social networking as a means of discovering what consumers are feeling and saying. By taking this approach the company will be in a better position to respond more effectively to consumer complaints and can “positively influence customer satisfaction” (Pride and Ferrell 2009, p. 77). Many companies are using social networking and therefore social capital to keep them informed of consumer behaviour. For example, Comcast (an American cable company) and Bank of America have been using Twitter as a social networking tool for harvesting a source of data relative to market intelligence. By virtue of Twitter, these companies are able to post brief messages for the benefit of consumers, invite their questions and therefore get feedback from respondents (Pride and Ferrell 2009, p. 77). Aside from the deliberate and direct communication with customers, business can conduct what is referred to as “observational research” via the internet (Poynter 2010, p. 380). This can involve going to different sites and reading consumer comments and bookmarking threads for continuous monitoring. Poynter (2010) describes this process of social networking observation as either “e-ethnography or netnography” (p. 38). Netnography becomes e-ethnography when observational research expands to include the researcher putting out questions for consumers or starting discussion threads with consumers in the social networking community (Poynter 2010, p. 380). Radian6 has developed tools for assisting businesses in conducting observational research over the internet. Radian6’s dashboard tool allows marketing researchers to avoid having to go from site to site by providing a method for locating “meaningful results and actionable data in social media” (Radian6 2011). Dashboard incorporates Radian6 Insights which provides “an additional level of information from” the researcher’s “posts and sources, including demographics, influence, geolocation, sentiment and topic categorization” (Radian6 2011). Radian6 monitors social media via the internet and permits researchers’ access to communications relative to the brand and products in a timely fashion. These communications are collected and organized so that the researcher does not have to search the internet and sort out the relevant communications from the irrelevant communications (Radian6 2011). Radian6’s Dashboard also provides deeper insight via Raidan6 Insights. This tool puts together data amassed by Radian6 with other material from other partners who provide insights relative to demographics, geography, influences and entrants to the market. This kind of information helps marketing researchers know who the participants are, where communications are being conducted and can therefore make informed decisions, make meaningful analyses and amass information “from raw information” (Radian6 2011). Radian6’s Engagement Console is another tool for scanning and sorting through social networking communications. It is a computer application that permits researchers to “listen, engage and coordinate” their “outreach across teams and departments” (Radian6 2011). The social web is captured in its entirety including Twitter, Facebook, blogs, news, discussion threads and video sharing online. This netnography becomes e-ethnography because researchers can extend the application to integrate “custom or pre-built applications like Salesforce Chatter” (Radian6 2011). Summary Dashboard is yet another of Radian6’s tools for social networking data harvesting. Summary Dashboard facilitates the monitoring of the business’s brand via social networking communications at one place. It permits a “one easy-to-read view” (Radian6 2011). This way researcher obtain an understanding of the “volume, overall sentiment, key demographics, influencers” and other information helpful to marketing a brand, or product or responding to the competition. Additionally, Summary Dashboard furnishes data available throughout the remainder of Radian6 applications and puts it together at Summary Dashboard (Radian6 2011). Radian6 Mobile is also used for facilitating the collection of data in circumstances where the researcher is away from his or her computer. This permits researchers to keep up with all discussions about their brands and/or products at all times. This allows researchers to engage customers at any time (Radian6 Mobile 2011). Radian6 Mobile therefore takes into account that important discussions conducted by consumers may need immediate responses from brand owners and product marketers either directly or indirectly. Taken together Radian6’s platforms and applications have provided marketers and market researchers with the tools for tracking buzz and collecting feedback and analyses in real time (Harden and Heyman 2010, p. 174). This method of buzz tracking and gathering opinions via immediate and real time posting changes the way that market researchers harvest and analyse and respond to consumer behaviour. Previous surveys, questionnaires and other methods of collecting information about consumers’ behaviour were not real time. Quite often information gathered today and communicated at a later date, can become out-dated because of sudden and unforeseen changes in the market. Radian6 permits on-going monitoring so that businesses can keep abreast of consumer behaviour, market situations and conditions as well as changes in each of these areas. By taking this approach, businesses can respond more effectively and more efficiently to changes, demands, preferences and perceptions of consumers and other factors that may contribute to market conditions and changes. Thus the buying decisions of consumers can be tracked, understood and predicted in real time rather than waiting for market conditions to manifest themselves in sales records. While it is important to keep abreast of the long-term outcomes of consumer behaviour in determining how best to change, improve or phase out a product, more immediate information could help predict and prevent negative outcomes. In other words, applications like Radian6 can be combined with traditional marketing research techniques. Traditional marketing research techniques such as qualitative, quantitative and casual research methodologies can help researchers to understand other factors that impact consumer behaviour more generally and influence market conditions and situations. Traditional marketing research methodologies provide data for analysing the operational environment and consumer behaviour more generally in the market. These methodologies facilitate long-term goals for changing products or brands and assessing the competition. These methodologies also provide information that can be used to assess and predict consumer behaviour more generally. However, social networking applications such as Radian6 is more useful for monitoring how products and brands are being received by consumers. It also permits immediate feedback for consumer behaviour relative to products and brands. Therefore while traditional research methodologies provide an overall picture of external and internal factors that operate in the market to influence consumers, social networking or social media research provides researchers with an up-to-the minute monitoring process. It is therefore recommended that companies today, continue to use traditional research methodologies for ensuring that it gains insight into how the operational environment is influencing consumer behaviour and how consumer behaviour is influencing the operational environment. In the meantime, business organizations should subscribe to each of the tools provided for by Radian6. By taking this approach, the company will be in a position to not only plan ahead, but to make any changes to those plans as the information becomes available via Radian6. Bibliography Baker, M. and Saren, M. (2010). Marketing Theory: A Student Text. London, UK: SAGE Publications, Ltd. Churchill, G. and Iacobucci, D. (2009). Marketing Research: Methodological Foundations. Mason, OH: South-Western Cengage Learning. Evans, D. and McKee, J. (2010). Social Media Marketing: The Next Generation of Business Engagement. Indianapolis, Indiana: Wiley Publishing Inc. Harden, L. and Heyman, B. (2010). Marketing By the Numbers: How to Measure and Improve ROI of Any Campaign. New York, NY: AMACOM. Hunt, T. (2009). The Power of Social Networking. New York, NY: Random House, Inc. Passikoff, R. (2006). Predicting Market Success. Hoboken, NJ: John Wiley and Sons, Inc. Poynter, R. (2010). The Handbook of Online and Social Media Research. West Sussex, UK: John Wiley and Sons Ltd. Pride, W. and Ferrell, O. (2009). Foundations of Marketing. Mason, OH: South-Western Cengage Learning. Radian 6 (2011). http://www.radian6.com/get-started/what-we-do/ (Retrieved 28th June, 2011). Read More