Buyer and Consumer Behavior - Assignment Example

Buyer and consumer behavior Executive summary This assignment deals with the fast food company Nandos’s. The company has its presence in thirty countries of the world. This firm prepares and sell’s different variety of foods. But presently the performance of this brand is bad. It is facing strong competition with the brands which are operating its business in this industry. The strong competitor of Nando’s are KFC, McDonalds’, Subway etc. all of these companies produce almost same variety of products and have their presence in various countries of the world. With their strong and effective marketing strategies the companies are able to capture huge amount of market share and large number of customers. As a result the brand performance of these companies is better than Nando’s. This first food company has low brand awareness and for this reason Nando’s is earning less revenue than other. Duplication of the Purchase Law has been highlighted in this case. Importance of brand attitude regarding Nando’s is focused in this assignment. Brand salience is important for this company. For this reasons various issues have been highlighted in this assignment regarding the implementation of various salient features in Nando’s. Factors related to demographic segmentation which influence the performance of the company have been focused here. Contents Executive summary 1 Contents 2 Section 1: Brand Performance 3 Answer 1 3 Answer 2 4 Answer 3 4 Section 2: Awareness & Salience 5 Answer 4 5 Answer 5 6 Answer 6 7 Section 3: Demographic & Segmentation 9 Answer 7 9 Answer 8 10 References 11 Section 1: Brand Performance Answer 1 The major competitive brands of Nando’s are McDonalds, Hungry Jacks, KFC, Subway etc. All of these brands are able to capture huge amount of market share and customers. All the competitive brands have implemented effective marketing strategies for which they are able to penetrate their target market efficiently. With the innovative food products KFC, McDonalds, Subway etc are able to satisfy their customers. They have made a good connection with the customers and establish strong relationship with them. The company Nando’s has its business in many countries of the world but it is not so efficient in its marketing strategies. For this reason the company is not able to beat its competitors. Most of the people prefer purchasing food products form McDonalds’, KFC, Hungry Jacks and Subway. As a result the purchasing frequencies of these companies’ products are higher than Nandos. The buyer of Nando’s purchases its food products 1.1 times for a given period of time. This company is able to penetrate only 23% of its target market. The brand Nandos does not have any loyal customer. But all of its competitive brands except Subway have many loyal customers. This is one of the important reason for which the sale of Nandos is significantly low among all competitors. It competitors company have various varieties of food products in different categories through which they are able to attract and retain more customers. But the marketing strategies of Nando are weak. So the company is not able to utilize its product categories effectively for attracting more customers. As a result the company is ranking low among all its competitors regarding its sales. For increasing sales all the companies have focused on increasing their market share, purchase frequency of customers, market penetration etc. But Nandos is unable to deliver good performance in these aspects for which the Brand performance of Nandos is considered as bad in respect to its competing companies. Answer 2 Presently the performance of Nandos is in a very bad shape. The Company does not have a strong customer base for which the growth and development of the company is hampered. Many strong competitors of the brand are present in the market who have acquired huge amount of market share and large number of customers. For growing the brand the company needs to increase its market shares within a short span of time and for that reason it has to increase the its customers loyalty. This marketing strategy will help Nandos to develop a strong customer base. By this strategy the firm will be able to increase its sales volume which will facilitate it in earning huge revenue. Customers are one of the most important things of a company which contribute a lot in its growth and development. Therefore the strategy of Nandos regarding customer loyal can become very effective for the business. The company can follow reinforcement model for increasing the loyal of its target customers. Answer 3 Most of the brands in fast food industry share their customers with each other. This is known as Duplication of Purchase law. The main competitors of Nando’s are KFC, McDonalds, Hungry Jacks and Subway. All of this fast food companies have an intense competition among each other. They competes on the basis of price, food quality and food variety. These companies try to acquire maximum number of customers. As per Duplication of Purchase Law a customer of a particular brand purchases product from other brands more frequently than it buy’s products from that particular brand. The brands from which the customers prefer to buy deal in almost similar kind of products. Generally the customers select the products of different brands based on the size effect of various products. Purchase duplication is closely related with brand penetration and market share of the company (Percy, 2008). When a particular brand sells a unique type of product which is not sold by its competing companies then customers purchase the unique products from that particular brand. This is a deviation which goes against the expected pattern of consumer behavior and Duplication of Purchase Law. One of the possible reasons of such deviation is the product is solely available to a particular brand. No other company can produce that product. The quality of the products or service is extremely high in a particular company. Its competitive brands are not able to produce such high quality products. So the customers can deviate from Duplication of the Purchase Law. From the Duplication of the Purchase Law table explains that a customer can purchase same types of products from different brands. So the marketing manager of Nando’s can help the company to develop a unique type of food product which is not produced by its competitors. By this way he can increase customer loyalty. The marketing manager also can insist Nando’s in offering very attractive discounts which are not provided by other fast food companies (Sharp & Dawes, 2001). Section 2: Awareness & Salience Answer 4 Attitude of a brand is closely associated with the share of the brand. Big brands have more customers thus they have a strong attitude towards the business. The performance of the brand strongly influences the attitude of the customers. The customers who are satisfied with the brand have a positive attitude towards the brands. Attitude of a brand focuses on evaluating the performance of the brand. By building strong attitude a company can attract maximum number of customers. Measuring brand salience is not so much important for Nando’s by this process the company has to consider many attributes of the brand. Presently by measuring brand attribute properly, Nando’s can influence create a strong image of the brand in the competitive market (Heath, 1999). Brand salience means the propensity of a company to get noticed by the customers in a buying situation. Both qualitative and quantitative things of a firm are involved in Brand salience. The concept of brand attitude mainly deals with the customer’s perception about the brand and image of the brand in the market. On the contrary brand salience involves in highlighting the various attributes of the brand (Hammond, Ehrenberg & Goodhardt, 1996). The advantages of measuring brand salience are as follows: It helps the brand to understand the effectiveness of its different attributes. It will support a company in improving its functional qualities. Customers taste and preference are understood by this. It is important to build brand salience for increasing the productivity of the company. Answer 5 As per table 3 the performance of Nando’s is very low in comparison to its competitors. The competitor brands like McDonalds’, KFC etc have given a huge effort in making their brand attributes very strong. These companies are able to capture strong position in the competitive market by effectively using their brand attributes. Nando’s is not able to deliver expected performance. Most of its competitive brands have made the customers aware of their products. As a result these companies are experience high overall brand awareness. The companies have communicated its brand attributes in such an effective way which helps the company in gaining huge number of customers. But Nando’s brand awareness is very low in different countries of the world. Therefore the company is facing problem in attracting customers. It is unable to compete with its strong competitors in respect of their brand attributes. As a result the overall brand awareness of Nando’s is low (Kennedy & Ehrenberg, 2001). People are not so attracted with its salient features for which they prefer other fast food companies than Nando’s. Ineffective salient features of Nando’s negatively affect its customer base. Its competitive brands have good number of customers who are attracted towards the brand for their salient features. By Nando’s is incapable in attracting customers by this way. As a result the company ranks low in Awareness & Salience Metrics. Answer 6 Nando’s has to consider brand salience to develop its marketing strategies. The company needs to analyze the experience of its buyers for enhancing and establishing attractive salient features of the brand. The firm can provide various gifts and benefits to its customers for attracting them to purchase its products. Nando’s can sell low fact or refreshing foods which the customers normally prefer to eat. The functional qualities of the company like its business operational methods and services can be improved for satisfying customers (Wright & Esslemont, 1994). Nando’s should analyze the salient features of its competitive brands for establishing effective attributes through which it will be able to beat its competitors. Nando’s should advertize properly about its fast food products for making the customers aware of the brand and its various products. 10 cues are expected to be included in Nando’s advertisement (Neal, Quester and Hawkins, 2004). They are as follows: The advertisement should give a proper idea about the brand. It needs to highlight the products the company is offering. The advertisement should focus of the type of service which the customers will receive when they will purchase products from Nando’s. It will focus on Nando’s high quality of food. The operational service of the company needs to be shown. A small clipping should be present in the advertisement regarding product manufacturing processes. The benefits of having Nando’s food needs to be highlighted. The timing of the stores must be communicated in the ads. The advertisement should be very interesting. It should deliver a message to the viewer which will help to build strong image of the company on the mind of the customers. Section 3: Demographic & Segmentation Answer 7 The customer profile of Nando’s is very different from its competitors. The customer whose relationship status is single purchases more products from Nando’s. Its competitors companies do not have so have buyers who are single. But Nando’s experiences high single deviations among its competitive companies. Therefore the number of single customers can increase or decrease in Nando’s. This company has large number of couple buyers which is almost similar with its competitors. Couple deviation is low in case of Nando’s. The number of divorced or separated customers is moderate in this company in compared with its competitors (East, Wright, and Vanhuele, 2013). The deviation of divorced customers is also moderate in case of Nando’s. Huge number of people who is earning less than $50,000 per year is the customers of Nando’s. But in this category the top brands like KFC, McDonalds have more customers than Nando’s. Deviation of such customers in Nando’s is moderate. The company also has good number of customers who are earning more than $50,000 per year. Deviation of such customers low in Nando’s when compared with its other competitors. People of male gender tend to purchase the products of McDonalds. Products of Nando’s have less popularity among male people. Deviation level of male customers is moderate in this company. But large number of female people likes to have Nando’s products (Sharp, 1997). This company has a close competition with its competitors in this category. For all of these reasons the customer profile of Nando’s differ from the other companies based on various demographic characteristics. Answer 8 Effective marketing strategies are required for Nando’s for handling the customers based on demographic segmentation. It marketing strategies needs to be planned in such a way which will help the company in lowering the risk of losing its customers. The company experiences a close competition with its competitors in various categories of demographic segmentation. For this reason the firm has to do some unique things which will help its in retaining its customers. The company can provide gifts or discounts to its loyal customers for encouraging them to purchase more Nando’s products and stay loyal to the brand. For increasing its sales among male customers Nando’s can introduce new food items which are generally preferred by them (Dall’Olmo Riley and et all, 1997). It can establish different interesting programs which will influence both people to purchase food products from Nando’s. References Dall’Olmo Riley, F., Ehrenberg, A., Castleberry, S., Barwise, T. and Barnard, N., 1997. The Variability of Attitudinal Repeat- Rates. International Journal of Research in Marketing. 14(5), pp. 437-450. East, R., Wright, M. and Vanhuele, M., 2013. Consumer Behaviour: Applications in Marketing. New York: Sage. Hammond, K, Ehrenberg, A & Goodhardt G., 1996. Market segmention for competitive brands. European Journal of Marketing. 30(12), pp. 39-49. Heath, R., 1999. The low-involvement processing theory. Admap. 34(1), pp.14-17. Kennedy, R. & Ehrenberg, A,. 2001. There is no Brand Level Segmentation. Journal of Marketing Research. Spring, pp. 4-7. Neal, P., Quester, P. & Hawkins, D., 2004. Australian society: demographics and lifestyles.” Consumer Behaviour: Implications for Marketing Strategy. New Jersey: McGraw-Hill. Percy, L., 2008. Strategic integrated marketing communication. Oxford: Elsevier. Sharp, B & Dawes, J., 2001. What is differentiation and how does it work? Journal of Marketing Management, 17(1), pp. 739-759. Sharp, B., 1997. Attitudes & Future Buying Behaviour. Ehrenberg-Bass Institute. UNISA Working Paper. Wright, M. & Esslemont, D., 1994. The Logical Limitations of Target Marketing. Marketing Bulletin. 5(1), pp.13-20. Read More