Consumer Behavior - Research Paper Example

Consumer Behavior Table of Contents Task 1 1 Consumer Behaviour 4 Task 2 9 Own Reflection 14 Task 1 The word ‘retro’ has been gaining huge popularity since the past few decades. It is one of the most widely used terms in the context of consumer behavior as well as marketing. The term is somewhat a stylish synonym for phrases like ‘simply old’ or ‘old-fashioned’. For instance, few years ago Monaco’s tourism office repackaged a standard tour which included visits to an exhibition of ‘Napoleonic Memorabilia’ and ‘Principality’s Wax Museum’ as ‘Retro Day: A History and Tradition Tour’. In this case ‘retro’ can be equated with ‘classic’ or ‘timeless’. ‘Retro’ can also depict a viewpoint of life. Technological obsolescence can also be described by ‘retro’. For instance cash registers and manual typewriters have become retro. It is observed that ‘retro’ has often been dismissed as a fodder for the relentless appetite of popular culture and as fashionable novelty. However, the fact which is more often overlooked is that a basic shift in the popular relationship with past is suggested by retro (Guffey, 2006). Retro products are modern products that are inspired by the past. Some of the retro products are new designs with detailed touches and styles that remind an earlier period. Some of them are re-issues or replicas of old favourites. Most of the retro products look old fashioned but they perform just like their modern counterparts (Retrowow, n.d.). The rise of retro products makes marketing an interesting concept. Marketers, on the one hand, are continuously reminded of the requirement of the product differentiation which is crucial for gaining competitive advantage in the present business environment. On the other hand the concept of updated imitations of the old products (retro products) is becoming more and more popular. In order to analyse the rise of retro products one aspect that has to be considered is the nostalgia and its relationship with marketing. ‘Nostalgia boom’ is one of the most important characteristics of the late 20th century. Several marketing experts have investigated the phenomenon (Brown, Kozinets, & Sherry Jr. 2003). For today’s marketers, previous season’s ‘blue’ is the ‘black’ of this season. For them comedy of the previous year is the New Year’s rock ‘n’ roll. A mere glance at the present marketing landscape is likely to reveal that retro has become de rigueur (fashion) and up-to-date has become out-of-date. Let’s come to the real world of marketing where new Jaguar S-Type significantly looks like the eternal Mark II which was the beloved of the police officers of 1960s. The advertising campaign regarding this S-Type included strap lines like “The Style of The Last Generation, The Excitement of The Next”. The TV commercial featured a bygone track (just a little bit of history repeating) of Shirley Bassey as the background music. Another automobile giant, Mercedes was not outperformed by such retro positioning. The company was found to be promoting its brand by featuring an old number of Janis Joplin (“Oh Lord, won’t you buy me a Mercedes Benz...”) (Brown, 2001). Several products that are launched recently are actually imitation of old designs. For instance the Volkswagen Beetle, Mini Cooper and Chrysler PSV are all ‘retro’ designs that have been revived. The Volkswagen Beetle is basically an updated edition of an original design of 1933. In addition to cars there are several household appliances like toasters, fridges that are actually designed in the styles of 1950s. The success of such ‘retro’ products depend on four A’s which are Allegory, Arcadia, Aura and Antimony. [Source: Blythe, 2006] Allegory is referred to the story and mythology that is surrounding the original design and brand. When there is a well-known history associated with the original product, an allegorical impact is likely to be created. For instance the popularity of original beetle made it a star in the movie series. Even the film named ‘the Italian Job’ had Mini Cooper as a star. The toasters that are designed in the style of 50s stir up memories of childhood. Arcadia is found to be mainly based on nostalgia. However, in general it reminds a non-existent past. For example 1950s is often considered as golden age, whereas in reality it was the decade of fear, of war and an atmosphere of paranoia. Aura is referred to the essence of a brand and the air of mystery that is surrounding it. For instance Chrysler PSV reminds the imagery of America in 1940s. Antimony is basically brand paradox. It is true that new technologies are found to be overpowering and unstoppable, but at the same time it is also true that the complexities of new technologies are mainly responsible for creating the desire of returning to a less high tech and simpler past. Consumers purchase retro products as they want to bask in the past. However they also expect that the products will perform to the modern standards. It is found that the original Mini Cooper was uncomfortable as well as unreliable both to ride in and to drive. The new edition is more reliable, comfortable and most importantly it retains the style. This is the main reason behind the fact that people like it so much (Blythe, 2006). Consumer Behaviour Consumers are the last component in the marketing value chain. Products are made for consumers. It is needless to say that understanding the consumer behaviour is one of the most important at the same time most challenging tasks for marketers. It is ‘important’ because based on the understanding of consumer behaviour the product is likely to be made so that it can achieve its desired success. It is ‘challenging’ because there is no defined method that will help in understanding the consumer behaviour. It is very likely that consumers will behave differently in case of different products. Consumers’ perception regarding different products is also likely to be different. The most important aspect of consumers that has been thoroughly studied by the marketers over the years is their purchasing behaviour. The entire consumer decision making process can be divided into three interrelated stages which are input, process and output. In the input stage consumers are exposed to a product or a need for product. The required information regarding the product is provided by the firm’s marketing activities. Generally firm’s marketing activities provide the information related to the product, price, promotion and its distribution channel. In addition to this there are several external socio-cultural factors that provide information to the consumers. Such factors include friends, family, neighbours, social class, sub cultural and cultural memberships. The combined impact of firm’s marketing activities and the influence of friends, family, culture and social class is likely to have a great influence on the decision making process of the consumer. [Source: Schiffman, & Kanuk, 2004] In the process stage, the actual decision making process takes place. In this stage consumers recognise their needs, search information regarding the product and evaluate various alternatives. There are several psychological factors that have a great influence on these three activities. These factors are perception, motivation, personality, learning and attitudes. The experience that consumers gain during the process of searching information and evaluating alternatives might influence the existing psychological attributes of the consumer. The final, which is the output stage, includes two post- decision making activities which are closely related. These are purchase action and post- purchase evaluation. Purchase can be of two types, trial and repeat purchase. The experience that is gained in the post purchase evaluation process can influence the perception and attitudes of the consumer towards the product and this might make him/her to make a repeat purchase (Schiffman, & Kanuk, 2004). If the above mentioned decision making model is analysed in the context of retro products, it will be found that retro products are heavily promoted by the marketers and most importantly they are promoted in various unique ways that make consumers nostalgic. Consumers who are fond of past traditions, cultures, art get easily attracted to the retro products and eventually a need is generated for the product. Once, this need is recognised, consumers search all the required information regarding the product. They also look for various alternatives. Now, in case of retro products, the number of alternatives is expected to be lower than any normal product. The post purchase evaluation is a crucial stage in case of a retro product. If the consumer’s expectation is not fulfilled after using the product, in other words if the product fail to take consumers in the memory lane of the past, then it is very likely that the product will not be purchased in future. Moreover retro products are not purchased for meeting the daily requirements; as a result the chance of repeat purchase is much lower as compared to any normal consumer good. In addition to the capability of bringing the nostalgia back, a retro product can also be evaluated on the basis of its usability. Today’s consumers also a retro product, want all the technological convenience. Moreover they want a modern look even in a product which is based on some old design. As a result producers and marketers need to present the product after considering all these factors. An important fact that came out from the research of Steven Miles, Kevin Meethan and Alison Anderson is that most of the retro products are purchased by the gift-givers and not by the consumers (Miles, Anderson, & Meethan, 2002). As a result, people who are consuming are not actually purchasing the goods and those who are purchasing them are not consuming. Hence the purchasers are not going through the post purchase evaluation phase and this in turn lowers the possibility of repeat purchase. However, consumers who are actually given the gift can evaluate the product after using it and without going through the earlier phases of the decision making process. As far as retro products are concerned, they are seen from a different point of view when they are purchased and consumed by the consumers. In other words, consumers perceive retro products differently from any normal product. It is observed that retro products are not consumed in the manner in which general bulk-produced consumer goods are consumed. Culture of retro product consumption is not as radical or subversive as it might appear (Miles, Anderson, & Meethan, 2002). Steven Miles, Kevin Meethan and Alison Anderson have found that retro products were previously bought because of their novelty, but now they are purchased because of the element of familiarity associated with them. The original consumers of the retro products were not very interested regarding the design, industrial background and origin of the product. However today, retro products are purchased as they carry a craft and artistic background. Furthermore today’s consumers see retro products as moments of modernity and signifiers of periods. Older consumers purchase the retro products because of the nostalgia associated with them, but for today’s youth these products are needed to be made familiar with the help of TV, film, radio and various other mediums (Miles, Anderson, & Meethan, 2002). Task 2 The theories and models of consumer behaviour can be better understood by applying them in the context of a real company that has adopted new marketing initiatives and modified existing ones in order to cope up with the changes in consumers’ behaviour. The decisions regarding the marketing strategies of a company are often made after an in-depth analysis of the factors that influence consumer behaviour. It is found that there are several factors that are likely to have a significant influence over the consumer behaviour. These factors can be classified into four different categories based on their nature. These categories are psychological, cultural, social and personal. Each of these different categories includes number of factors. For instance, various psychological factors that are likely to influence the consumer behaviour are learning, perception, motivation, beliefs and attitudes. Similarly various cultural factors are culture, social class and sub culture. The third one which is the ‘social’ includes factors like family, reference groups, roles and status. Finally various personal factors are life cycle stage, age, lifestyle, occupation etc. Among these influencing factors cultural and personal factors are found to be the most significant. Marketers of a company need to take into consideration all the cultural and personal factors prior to making any marketing strategy. [Source: Wilson, & Gilligan, 2005] According to Richard M. S. Wilson and Colin Gilligan, the factor that has the most enduring and fundamental influence of consumers’ behaviour is the ‘culture of the society’. This is mainly because human behaviour is the outcome of our socialisation, firstly within the family and then within various institutions starting from schools. Consumers develop various sets of values, preferences, perceptions and behaviour patterns. According to Schiffman and Kanuk, in western countries these sets of values include success, achievement, progress, efficiency, practicality, material comfort, freedom, individualism, youthfulness etc. This set of values is further influenced by the subcultures which include religious groups, nationality groups and racial groups. Each of these is likely to have a great impact on the ethnic taste, taboos, cultural preferences, lifestyle and attitudes (Wilson, & Gilligan, 2005). Personal factors are also found to be having heavy influence on the consumer behaviour. Such factors include life cycle stage, age, occupation etc. All these factors are mainly used by the marketers in the process of segmenting the market. Such segmentation on the basis of the above mentioned personal factors help the companies to identify their target market with more ease. Choice of the influencing factor is mainly dependent on the nature of the product and on the overall objectives of the firm. Apart from cultural and personal factors, social factors are also crucial in the process of making appropriate marketing strategies. Important social factors include family, roles, status, and reference groups. It is found that consumers’ buying behaviour is heavily influenced by both family of orientation and family of procreation. Family of orientation is referred to the parents, sisters and brothers, whereas family of procreation is referred to the children and spouse. In addition to family, reference groups also influence the buying behaviour. According to Richard M. S. Wilson and Colin Gilligan, reference groups can be of four different types which are primary membership groups, secondary membership groups, aspiration groups and dissociative groups (Wilson, & Gilligan, 2005). Primary membership groups include family, friends, neighbours and colleagues, secondary membership groups include professional societies, religious groups etc. It can easily be expected that consumers will interact more with the primary membership groups rather than the secondary membership groups. There are certain groups that a person is likely to belong to; such groups are called aspiration groups. Finally dissociative groups are those whose behaviour and values are generally not accepted by an individual (Wilson, & Gilligan, 2005). The fourth category, which is the psychological factors, includes learning, perception, motivation, beliefs and attitudes. Motivation is referred to the internal energising force which orients the activities of a person in the process of achieving a goal or satisfying a need. Consumer’s decisions are influenced not by any single motive rather they are influenced by a set of motives. Marketers need to identify different possible motivations behind any decision made by consumer. They can take help of ‘Maslow’s hierarchy of needs’ for identifying such motivations. Another important psychological factor is perception which is referred to the process that involves selection, organisation and interpretation of information inputs in order to produce a meaning. Different consumers are likely to have different perception regarding different products and brands. Marketers’ role is to change the consumers’ perception regarding a product. Effective promotional campaigns are likely to be effective in doing such change. Attitude which is another crucial psychological factor can be defined as the positive or negative feelings that the consumers have regarding an object. Attitude apart from influencing consumers’ behaviour also influences the perception of the consumer regarding a product (University of Delaware, n.d.). The role of all these above mentioned factors can be better analysed in the context of a company that has given them enough significance in the process of making marketing strategies. Marlboro, one of the most popular cigarette brands in the world is found to be one such company whose marketing strategies are influenced by these factors. In fact Marlboro is the leading brand of the Philip Morris which is a subsidiary of Altria Group. Marlboro is found to be the number one brand that is consumed by adults from all age groups. In 2008, the market share of the brand was larger than the combined market share of other competitive brands in US market (Phillip Morris, n.d.). Marlboro is marketed differently in different parts of the world. Such different marketing strategies are adopted on the basis of various factors that influence the consumers’ buying behaviour. Since these factors have different significance in different parts of the world, they are expected to influence the consumers’ behaviour and hence the marketing strategies of the firm. Such differences can be further explained by using some examples of Marlboro’s marketing as well as advertising strategies. It is observed that the famous Marlboro cowboy is shown alone when the brand is promoted in the US market, whereas the same cowboy is shown in a group when the brand is marketed in the Japanese market. [Source: Sengupta, J] This difference in advertising is simply because of the cultural differences of the two countries. In American culture freedom, individualism and youthfulness are important. Americans do not believe in group culture. They are individuals first then groups. On the other hand in Japanese culture individualism is less significant. The Japan consumers think that the cowboy which is shown alone is the symbol of loneliness. In Japan and in most of the other Asian countries people believe in ‘group culture’. Individuals think themselves as a part of group first (Sengupta, n.d.). This is the reason why Marlboro has taken different marketing strategies in different countries. Personal factors like age, lifestyles played an important role in the branding strategies of Marlboro. It is already mentioned that such factors are mainly used in identifying the target market. It is found that in early 90s the management of Marlboro classic determined its target market on the basis of age and lifestyles of the consumers. The brand was primarily targeted to the young adult males and students whose ages were falling in the range of 24-35 years. In addition to these other factors that were taken into consideration were related to the lifestyle of the consumers. Marlboro classic was targeted to those male young adults who live in urban areas and who believe in ‘individualism’ (University of California, 1992). Marlboro is just an example. Most of the firms, especially the consumer goods have to take all the relevant factors that are capable of influencing the consumers’ behaviour into consideration in the process of making effective marketing strategies. Own Reflection Consumer behaviour is one of the most important and difficult topics in marketing and being a student of marketing I was known to this fact. However after the completion of this project I have come to know that it is not only one of the most difficult but it is also one of the most interesting topics in marketing. Theories regarding consumer decision making process have helped me to have better understanding about the way in which consumers behave while they are making any purchase. Consumer purchasing decision that apparently seems like a one step process is basically a multistep complex process. During the course of this project I have gained a clearer understanding regarding this process. From psychological to cultural, from personal to social, consumers’ decision making process is influenced by several factors. I had rough idea about these factors, but since I had to gain insight of each of these factors during this project, now I have fair knowledge about these influencing factors. In addition to these theories I also have learned about the ways in which the real companies have analysed these factors in the process of developing their marketing strategies. My chosen brand is Marlboro and during the analysis of various influencing factors in the context of Marlboro I learned about how these factors act differently in case of different parts of the world. As far as the decision making theory is concerned, I have found out how this model can be analysed in the context of retro products in order to analyse consumers’ reaction while they are consuming or purchasing those. References Blythe, J. 2006, Principles & practice of marketing, Cengage Learning EMEA Brown, S. 2001, Marketing: the retro revolution, SAGE Brown, Kozinets, & Sherry Jr. 2003, Teaching Old Brands New Tricks: Retro BfaiKting and the Revival of Brand Meaning, Journal of Marketing, Vol 67 Guffey, E. E. 2006, Retro: the culture of revival, Reaktion Books Miles, S. Anderson, A. & Meethan, K. 2002, The changing consumer: markets and meanings, Routledge Phillip Morris, No Date, Our Tobacco Brands, Phillip Morris USA, [Online] Available at: http://www.philipmorrisusa.com/en/cms/Company/Market_Information/default.aspx?src=top_nav [Accessed on May 12, 2010] Retrowow, No Date, What is a retro product?, Retro products, [Online] Available at: http://www.retrowow.co.uk/retro_products/retro_products.html [Accessed on May 12, 2010] Sengupta, J. No Date, Welcome to Mark529, [Online] Available at: http://www.bm.ust.hk/~mk529/session1.ppt [Accessed on May 12, 2010] Schiffman, L. G. & Kanuk, L. L. 2004, Consumer Behavior, Pearson Education University of Delaware, No Date, Psychological, Categories That Effect Consumer Buying Behavior. [Online] Available at: http://www.udel.edu/alex/chapt6.html#psychological [Accessed on May 12, 2010] University of California, 1992, Marlboro Classics Brand Communications Brief, Legacy Tobacco Documents Library. [Online] Available at: http://legacy.library.ucsf.edu:8080/o/z/q/ozq39e00/Sozq39e00.pdf [Accessed on May 12, 2010] Wilson, R. M. S. & Gilligan, C. 2005, Strategic marketing management: planning, implementation and control, Butterworth-Heinemann Read More