Buyer and Consumer and Behavior - Case Study Example

Buyer and consumer behaviour Contents Contents 2 Executive Summary 3 Brand Performance 3 Differences in competing brands 3 Duplication of Purchase Law 4 Brand Attitude 5 Comparison of brand salience and attitude 5 Performance of Smith’s 6 Impact of negative attitudes on growth of brands 7 Demographics and Segmentation 8 Type of customer base 8 Implication on marketing strategy of Smith’s 9 References 10 Executive Summary The study is about interpreting and measuring brand performance of Smith’s and other players operating in the industry. As per the results, market share and market penetration is highest for Smith’s in relation to other players in the industry. On the other hand, this particular brand even witnesses higher customer loyalty in relation to Kettle and Doritos. The greater purchasing frequency for Smith does indicate that more customers prefer to buy this brand again and again. There are even customers who are brand loyal towards Smith’s but even try different brands simultaneously which is often termed as duplication of purchase. The attitudinal responses of customers as depicted in table shows that there are certain negative attitudes possessed by customers toward the brand. However this form of attitude has no such implication on buying decision as this form of decision making is greatly associated with consumer behaviour. The study even reveals that customer profile of Smite is quite similar with its competitor and this puts pressure on marketing manager in terms of designing the best marketing strategy. Brand Performance Differences in competing brands The brand performance of a company is highly dependent on various factors such as market share, penetration, frequency of average purchase, category buying rate, requirement share of category and sole loyalty. In this particular case the brand performance of Smith’s has been compared with its competitors such as Kettle, Doritos, Red Rock Deli and Jumpy’s. The food industry can be regarded as highly competitive in comparison to other industry as in this consumer demand is highly fluctuating (Cheverton, 2005). As per the table, market share of Smith’s is the highest in comparison to other players in the industry such as Kettle, Doritos, Jumpy’s and Red Rock Deli. The market share being high for Smith’s basically means that their level of penetration is higher in relation to other competitors. For instance markets share of Kettle is 24 and its penetration percentage is 50 which for Smith’s is 72. On the other hand the factor purchase frequency denotes the degree to which a customer opts for the same product again and again. This element is even closely related to sole loyalty of customer. The rate of purchasing frequency is same for Smith’s and Kettle which denotes that both of the strong players in the market place. However the customer loyalty is more for Smith’s that are 22 in comparison to other firms in the industry and the lowest loyalty rate is of Red Rock Deli and Jumpy’s. The differences in the brands can be effectively measured in terms of customer loyalty and market share (Onkvisit and Shaw, 2009). These two factors indicate the level to which an organization has control on its target market. The brands such as Doritos, Red Rock Deli and Jumpy’s possess the least market share and its main reason is that they have not be able to retain their customers and neither implemented any form of penetration strategy to attain competitive edge in the industry. Duplication of Purchase Law The level of competition is high in the industry Smith operates and this is supported by some facts and figures given in table2. As per the table the main competitors of Smith can be identified by analyzing the data corresponding to the total individuals who opted for other brands in the market place. According to the figures Kettle and Doritos can be considered to be second preference of customers. Since these two brands are selected by consumers simultaneously with Smith’s. The competition as analyzed from the table within the chip market is highly complex. There is an increased rate of duplication for even those brands which possess high customer loyalty. For instance, Smith’s has highest market share and customer loyalty percentage but there are customers within the markets share of the company who even opts for other brands in the market place. On the contrary market share of Jumpy’s is the lowest and its buyers do not opt for other brands in the market place. Hence it can be stated that competition within chip market is such that more brand performance increases the level of consumer demand which if not fulfilled than customers intend to shift to other brands (Tielmann, 2010). The Duplication of Purchase Law states that brands often share customers. As per this law, customers of a specific brand tend to buy other brands more in total in comparison to buying the brand itself. The law even states that there is either a specific pattern which is followed by consumer market in terms of choosing brands or there are no such groupings. There is certain deviation from expected pattern as customers of Smith’s opt for other brand products more often than customers of Jumpy’s which has relatively less customer loyalty. It can be stated that the major reason behind such deviations is more players in the industry, fluctuating customer demand and less involvement products. There are two major implications from the table which can be useful for any marketing manager such as analyzing which of the brands are mostly chosen by customers and in what span of time, and secondly, the level of brand loyalty that should be maintained by a firm in specific market share. Brand Attitude Comparison of brand salience and attitude Brand attitude can be defined as customer’s evaluation about a brand. This concept is closely knitted with evaluation of a brand instead of quality or quantity of memory structures. On the contrary, brand salience is all about propensity of a brand which is usually observed in varied buying situations. This is greatly reflected in quality and quantity of brand information network within the memory. The approach of brand salience even states that more cue with which a brand is linked would have an impact on the number of cues that a customer witnesses during buying condition. As brand salience relates to brand information present in minds of customers it can be associated with memory structure of customers (Richter, 2012). However brand attitude is all about brand evaluation in any given situation and it has no such link with memory structures. In overall context it is more essential to measure brand attitude simply because through this measurement a brand can be efficiently evaluated from multiple dimensions. On the other hand in most cases low brand performance is not only linked with brand information residing in memory of customers. Hence it is important for an organization to identify the areas where a brand achieve set standards and even determine those areas which need further improvement so as to survive in the market place (Pringle, 2008). It can even be stated that brand attitude measurement helps to identify the loyalty of customers toward the brand. This is a vital component as loyal customers not only drive in sales but even proclaim positive word of mouth. The word of mouth approach helps in convincing other customers to try the brand without any form of direct advertisement. Performance of Smith’s As per table3 there are two attitudinal responses which have been highlighted that are ‘it’s unhealthy’ and ‘it’s my favourite brand.’ The figures stated in the table clearly depicts that higher level of market penetration is associated with brand position in the industry. For Smith’s the degree of market penetration is highest and it is greatly reflected through its large customer base and their attitudinal response of considering it as their favourite brand. These data in the table can be associated with the scenario of chip market as more customers who are familiar with a specific brand consider it to be unhealthy. On the other hand those brands which has less market presence or has not been able to penetrate within the market, possess less attitudinal response from customers. As per the statistics it is evident that Smith’s, Kettle and Doritos are highly preferred by customers. Their attitudinal responses denote brand preference in the market place. It is highly expected that Smith’s will be performing well in the industry as it has large base of loyal customers and higher market presence (Lau, 2011). However as per the figures in table3 it can be stated that customers in context of total sample and even users consider the brand to be unhealthier than regarding it as their favourite brand. The products which are promoted by the company are unhealthy in nature and this has been greatly affecting the consumer market. As a result many customers are shifting to other brands or are developing negative image about the brand. In comparison to other players Smith’s has been stated as the favourite brand by customers but the proportion of users is relatively less than expected. Impact of negative attitudes on growth of brands I totally disagree with the statement as attitudes of consumer market cannot predict sustainability of a brand in the nearby future. It is often misinterpreted that negative attitude towards a brand affects the brand value in the market place. However buyers do not purchase a brand based on their attitude but rather on their need. Negative or positive attitude can be associated with the impression created in minds of customers. For instance loyal customers often carry positive attitude for a brand but are the most unstable components for a business as they are more likely to switch to other brands. Hence attitude cannot be judged as an element with which success or failure of a brand can be associated. On the contrary, if an organization such as Smith’s want to sustain its business operations it should be more inclined towards bringing forth certain changes in consumer behaviour. It is not true that since customers possess negative attitudes for the brand they are not purchasing the brand, but their behavioural approach plays the most important role in purchasing decision (Jeannet and Hennessey, 2005). Marketing managers should be cautious more about identifying the respective attitudinal associations customers possess for a brand rather than detecting specific attitudes. The objective of achieving desired goals can be fulfilled if proper strategy are formulated that aim towards reinforcing consumer behaviour rather than bringing forth any such change in attitude. There can be multiple reasons which govern the final decision of consumer to purchase a specific brand’s product. A brand attitude is often temporary and is not framed under full consciousness so it is essential to focus on consumer behaviour which detects how the taste and preference of customers change over time. Demographics and Segmentation Type of customer base The customer profile of the chip market has been analyzed on basis of three factors that are relationship status, total household income and gender. Customer profile of Smith’s can be considered to be similar with that of other players in the market place. For instance, relationship status of consumers of Smith’s is identical with that of Kettle and Doritos. In this section, all the players give more couples rather than those who are divorced or single. So for this particular parameter it can be said that elements of target group are similar. Along with Smith’s other competitors in the industry also focus more on couples as they prefer to consume such products more often. The nature of target group would be similar to great extent as taste and preferences of the group will be alike. However the main element due to which customer profile of Smiths can be said to differ from other brands can be income level of customers (Gelder and Woodcock, 2003). As per the facts given in table5 it is highly evident that all the brands target more those people belonging to income slab of more than $70, 000, then they focus on those individuals who has income in between $50,000 to $70,000, and finally they even target those people who has income below $50, 000. Lastly, gender is another element in demographic segmentation and figures in table6 denotes that all the brands even Smith’s target females more in comparison to males. The reason behind this customer profile is that females tend to have more fascination towards such snack food in comparison to males. Implication on marketing strategy of Smith’s Marketing strategy of Smith’s need to be highly competitive in relation to other players in the industry, since sustainability factor of the company is highly dependent on such strategies. The results of segmentation and demographics denote that all competitors of Smith’s target the same group like the company. This eventually makes thing more difficult for the company as customers possess wide array of choices. In order to sustain in this intense competitive market it is essential that the company frame such a marketing strategy which could provide added value to customers. The strategy should not only be aligned towards designing products so as to meet needs of customers but need to contain element which could differentiate one brand from the another. It is essential that Smith’s convey such brand information which can easily be stored in memory by customers (Kahn, 2011). On the other hand, as per the results it is highly evident that Smith’s intend to target the customer profile which is opted for by other players, but this needs to be eradicated from the marketing strategy. Instead the company should focus on narrow segment of individuals and promise to deliver superior quality of products and services which in turn could serve as a unique selling proposition (Hajdini, 2010). According to the target group’s income level, different products need to be designed and promoted which appears appealing to the customer base. References Cheverton, P., 2005. Key Marketing Skills: Strategies, Tools and Techniques for Marketing Success. Great Britain: Kogan Page Publishers. Gelder, D., and Woodcock, P., 2003. Marketing and Promotional Strategy. UK: Nelson Thornes. Hajdini, I., 2010. Innovation Management. Germany: GRIN Verlag Jeannet, J. P., and Hennessey, H.D., 2005. Global Marketing Strategies. New Delhi: Dreamtech Press. Kahn, K., 2011. Product Planning Essential. USA: M.E. Sharpe. Lau, J.Y.F., 2011. An Introduction to Critical Thinking and Creativity: Think More, Think Better. Canada: John Wiley & Sons. Onkvisit, S., and Shaw, J., 2009. International Marketing: Strategy and Theory. New York: Routledge. Pringle, H., 2008. Brand Immortality: How Brands Can Live Long and Prosper. Great Britain: Kogan Page Publishers. Richter, T., 2012. International Marketing Mix Management. Berlin: Logos Verlag Berlin GmbH. Tielmann, V., 2010. Market Entry Strategies. USA: GRIN Verlag. Read More