Marketing Consumer Behaviour Theories - Pepsi and Coca Cola in Australian Marketing - Case Study Example

Essay In Marketing Consumer Behaviour Theories Table of Contents 1.0 Introduction 2 2.0 Issues, Theories and Concepts of Consumer Behaviour 3 3.0 Relevant Literature 6 4.0 Consumer Behaviour of Pepsi and Coca-Cola in Australia 8 5.0 Conclusion 9 References 10 Bibliography 14 1.0 Introduction Consumer behaviour theories are a vital aspect of marketers from the perspective of marketing. Marketers analyse the behaviour of consumers towards brand promotion of a particular product. The buying behaviour of a person is influenced by several factors around the society and also from within the individuals. The consumer behaviour theories explain the preference and utility of an individual while buying particular products. Different individuals possess different aspects of buying behaviour due to variety of taste of the consumers. The positive or negative attitude towards the product is also based on behavioural traits of the consumers. The consumers purchase the product based on their perception about those particular objects after acquiring data from various relevant sources. Consumers of different market possess different buying behaviours and expectations from the product or brand. In this paper, the concept and theories of consumer behaviour in the marketing environment will be highlighted properly. It has been illustrated that how consumer behaves in a particular situation and how their behaviour gets altered while purchasing a product. The literature review of the consumer behaviour will be explained briefly and the consumer behaviour of Pepsi and Coca Cola in Australian marketing environment will be cited as an illustration. 2.0 Issues, Theories and Concepts of Consumer Behaviour Consumer behaviour encompasses cognitive, affective in addition to behavioural reaction of consumers towards products as well as services, and also response of consumers to the marketing of products along with services (Universitat Pompeu Fabra, n.d.). It is the decision making process of consumers and the involvement of their activities in obtaining, assessing, using and disposing of goods as well as services. Consumer behaviour refers to as a complex, multidimensional along with dynamic process and also the marketing decisions which are taken based on the assumptions related to consumer behaviour (New Age International, n.d.). The consumers on the basis of their needs adjust the purchasing behaviour of them. Consumers randomly choose the product and in every selection certain implications are incorporated in them. The buying decision is taken to satisfy the need of the consumers. Prestige is also considered as one of the intangible needs because a few individuals purchase certain products depending on their status in the society (Reference for Business, 2011). The factors which act as a significant role while influencing consumer buying behaviour are cultural factors, social factors, psychological factors and personal factors (Scribd, 2011). Culture has an influence on the ‘impulsive buying behaviour’ of a person. The theory of individualism as well as collectivism facilitates to have a better understanding of the phenomenon of an ‘impulsive buying behaviour’ of a consumer (Kacen & Lee, 2002). The culture of the society has an influence on the buying behaviour of an individual because human beings are largely affected by social factors which may include family, friends, clubs and others. The individuals from these factors understand and learn perceptions, values and their behaviour patterns. Social class of an individual is influenced by several other variables such as income, occupation, values and education (Wilson & Gilligan, 2005). In addition, social factors also have an impact on the buying behaviour of a person. Various factors include family, reference groups, status along with social role. The reference groups include primary membership group, secondary membership groups, aspirational group and dissociative groups. The influence of reference groups may tend to differ from one product to another and also various stages of individual’s life. Certain products are there which can be more easily influenced by reference groups and these include cars, clothing, drinks and others. Family also plays a basic role in influencing the buying behaviour of a product or brand by the consumer. Women play a significant role in the purchase of various products especially food and clothing. The status and role of an individual within the society also influence the individual’s buying behaviour. The status of an individual can have a significant influence on his buying behaviour. The personal traits of buyer such as age, occupation, economic condition, personality and lifestyle have an influence on their buying behaviour (Wilson & Gilligan, 2005). The personality traits of an individual generally decide about the fulfilment of consumer’s need (Reference for Business, 2011). The psychological factors which include motivation, learning, perception, belief along with attitude act as a main role in consumer buying behaviour (Wilson & Gilligan, 2005). The consumer behaviour theory comprises of two factors namely theory of preference and theory of utility. Preference signifies the personal taste of the consumer for a particular product. For example, a few has a preference for products and services which may include books, CDs and others, while a few prefers to spend time either in home or by travelling. Preference is totally depend on an individual and it differs considerably from person to person (Docstoc, 2010). The theory of utility consists of ordinal utility and cardinal utility. A utility function is a tool that indicates the preference ordering of an individual. It can also be referred to as level of satisfaction which is associated with each product. Consumers possess well-behaved preferences over various products and from these products a consumer may have a preference of one over the other or the indifference between the two. Several economists are concerned with the level sets of utility functions. They are not concerned with the number that the utility function assigns to any given level set. In consumer behaviour theory, these level sets are called indifference curves. When it is depended only on the shape in addition to location of a consumer’s indifference curves, this property of utility functions is called ordinal. When it is based on the actual amount of utility the utility function assigns to each indifference set it is referred as cardinal (Lazzati, n.d.). 3.0 Relevant Literature A few aspects related to the economic policy are not concerned with the knowledge of consumer behaviour. However, the variety of data in relation to theoretical and empirical thought has made the consumer behaviour theory an important aspect of marketing research study. Consumer behaviour theory is the association between hypothetical and estimation techniques (Blundell, 1988). Consumer behaviour provides better understanding and forecasting the subject of purchase and also the purchasing motives and frequency of the consumer towards the product. It is the fact that people has a desire to buy products due to the apparent value and not because of their major function. According to Trommsdorff, personal characteristics of the consumers act as a significant role for consumption of products. He also referred that the “consumer” is a term which can be used in place of ‘target customer’ and ‘consumer behaviour’. In 2004, four types of consumer activities were identified by Solomon and these are ‘consumption as an experience’, ‘consumption as a classification of scale’, ‘consumption as an instrument of integration’ and ‘consumption as a game’ (Stavkova & Et. Al., 2008). Various factors have influence on the decision-making process of consumers and these factors include personal, psychological along with situational factors. Personal factors such as age, occupation, income, sex and personality have a significant role in the consumer buying decision. Psychological factors such as motivation, perception, personality, skills and knowledge, positions and style of life have an influence on the consumer buying decision. Motivation is related to the inner driving force of the people that orients consumer’s activities to achieve the desired need. Several motives play different roles while making the purchase decision. Perception is the opinion or view of the consumer towards a particular product. The consumer collects the data from the environment and after processing and interpretation they provide perception to the data. On the other hand, personality is the inner trait and behaviour of a person, which persuade the buying decision of a consumer. The change of behaviour of a consumer is related to the skill and knowledge of the consumer. The process of learning is derived from the association between impulse and reaction. Thus, these factors have a great influence on the purchasing decision of the consumer towards a product. Negative or positive feeling of a person may change the perception, personality, motives towards the need of the product by a consumer. Situational factors such as social and physical environment of the consumer may influence the purchasing decision of the product. The decision of the consumer is based on the selection from a variety of brands or products (Stavkova & Et. Al., 2008). Status consumption related to consumer behaviour refers to the consumption of any product with an intention of showing status and wealth to others. For example, by using expensive and branded product in public and driving an expensive car is showing status in the society. In 1981, Mihaly Csikszentmihalyi and Eugene Rochberg Halton explained the term status consumption which denotes that “form of power that consists of respect, consideration, and envy from others that represents the souls of a culture” (Scheetz, n.d.). 4.0 Consumer Behaviour of Pepsi and Coca-Cola in Australia People are becoming more concerned for the environment and as a result cultural factors influence them a lot. Culture of a person or a region has an affect on the image of an industry. For Coca Cola in Australia, people drink the product as a matter of self expression and it makes them feel good. However, buying a product such as Coca Cola may not mean that people will feel cool and comfortable with the people around them. In soft drinks industry, Pepsi and Coca Cola are organising a number of events with a view to help the society. Thus, these are attracting the people and thereby developing a positive attitude towards the organisations (Language and Learning Online, 2011). In Australia, Coca Cola is a major player in the soft drinks market for consumer. The various products of Coca Cola are Coca Cola zero, Diet Coca Cola along with other brands which include Sprite, Fanta and Lift had recently made awareness of their products and boosted its sales. For Coca Cola trend towards providing convenient products continue to shape consumer behaviour (Convenience & Impulse Retailing Article, 2011). National campaign was performed by the consumers of Australia to remove soft drinks from the country in order to prevent obesity. Consumers have advised the company of Coca Cola and Pepsi to remove non-diet soft drinks from the country. Therefore, the giant consumer market of Coca Cola and Pepsi had slowed down gradually in Australian mature market (Centre For Science in the Public Interest, 2008). 5.0 Conclusion With reference to the report cited above, it can be concluded that the role of consumer buying behaviour in consumers is a significant factor in influencing their purchase decision and it also assists the marketers to know and understand carefully the perception of consumers towards a specific product. It also makes possible for the marketer to understand the factors influencing the consumer buying behaviour. It can be seen that the consumer perception and motives vary considerably due to the influencing effect of either society or their own satisfaction. The consumers in order to fulfil the satisfaction of the needs make the purchase of the desired product. The changing decision of the consumer from one product to another or from one brand towards the other is also based on the influencing behaviour around him. The marketers can adopt the strategy to influence the consumers by knowing their influencing character around them. The consumers show different behaviours for buying different products or brands. Their behaviour varies from place-to-place and also the society in which they belong. The buying motives of the individual entail them to satisfy their needs. Personality, knowledge and perception act separately in case of buying behaviour of a person. References Blundell, R., (1988). Consumer Behaviour: Theory And Empirical Evidence-A Survey. The Economic Journal. Retrieved Online on March 28, 2011 from http://agecon2.tamu.edu/people/faculty/cappsoral/agec%20635/Readings/Consumer%20Behavior%20Theory%20and%20Empirical%20Evidence%20-%20A%20Survey%20by%20Blundell.pdf Centre For Science in the Public Interest, (2008). Cola Promotion in Elementary School Physical Activity Program Cited. Consumer Groups in 20 Countries Urge Coke, Pepsi to Limit Soft Drink Marketing to Children. Retrieved Online on March 28, 2011 from http://www.cspinet.org/new/200801031.html Convenience & Impulse Retailing Article, (2011). The Carbonated Beverage Is Putting Up A Fight. Carbonated Beverage Sales Holding Up. Retrieved Online on March 28, 2011 from http://www.c-store.com.au/magazine/article/holding-up.htm Docstoc, (2010). Theory of Consumer Behaviour Theory of Preferences. Home. Retrieved Online on March 28, 2011 from http://www.docstoc.com/docs/2216632/Topic-2-Theory-of-Consumer-Behaviour-Theory-of-Preferences Kacen, J. J. & Lee, A. J., (2002). Impulse Buying. The Influence of Culture on Consumer Impulsive Buying Behavior. Retrieved Online on March 28, 2011 from http://bankjurnal.umm.ac.id/files/disk1/2/jiptummpp-gdl-jacqueline-100-1-kacenlee-p.pdf Lazzati, N., (No Date). Monotonic Transformations: Cardinal Versus Ordinal Utility. Mathematics for Economics (Part I) Note 10: Quasiconcave and Pseudoconcave Functions. Retrieved Online on March 28, 2011 from http://www.u.arizona.edu/~nlazzati/Courses/Math519/Notes/Note%2010.pdf Language and Learning Online, (2011). Part 1. Troy's Report. Retrieved Online on March 28, 2011 from http://monash.edu/lls/llonline/writing/business-economics/marketing/3.4.2.xml New Age International, (No Date). Introduction. Consumer Behaviour. Retrieved Online On March 28, 2011 from http://www.newagepublishers.com/samplechapter/000160.pdf Reference for Business, (2011). Consumer Behavior. Encyclopaedia of Business. Retrieved Online on March 28, 2011 from http://www.referenceforbusiness.com/management/Comp-De/Consumer-Behavior.html Scheetz, K. T., (No Date). Background & Introduction. A Modern Investigation of Status Consumption. Retrieved Online on March 28, 2011 from http://www.case.edu/artsci/dean/elf/documents/scheetzreport.pdf Scribd, (2011). Analyzing Consumer Behaviour. Consumer Behaviour. Retrieved Online on March 28, 2011 from http://www.scribd.com/doc/14711941/Consumer-Behaviour Stavkova, J. & Et. Al., (2008). Abstract. Factors Influencing Consumer Behaviour. Retrieved Online on March 28, 2011 from http://www.journals.uzpi.cz/publicFiles/01585.pdf Universitat Pompeu Fabra, (No Date). Course Description. Consumer Behaviour In Marketing. Retrieved Online On March 28, 2011 from http://www.econ.upf.edu/eng/graduates/gpem/pdf/courses/consumer%20behavior%20in%20marketing.pdf Wilson, S. M. R. & Gilligan, C., (2005). Strategic Marketing Management: Planning, Implementation and Control. Butterworth-Heinemann. Bibliography Deaton, A. & Muellbauer, J., (1980). Economics and Consumer Behaviour. Cambridge University Press. East, R. & Et. Al., (2008). Consumer Behaviour: Applications in Marketing. SAGE Publications Ltd. Read More