Introduction to Consumer Behavior: All of us are consumers. We consume things of daily use, We also consume and buy these products according to our needs, preferences and buying power. These can be consumable goods, durable goods, speciality goods or, industrial goods. What we buy, how we buy, where and when we buy, in how much quantity we buy depends on our perception, self concept, social and cultural background and our age and family cycle, our attitudes, beliefs values, motivation, personality, social class and many other factors that are both internal and external to us. While buying, we also consider whether to buy or not to buy and, from which source or seller to buy. In some societies there is a lot of affluence and, these societies can afford to buy in greater quantities and at shorter intervals. In poor societies, the consumer can barely meet his barest needs. The marketers therefore tries to understand the needs of different consumers and having understood his different behaviours which require an in-depth study of their internal and external environment, they formulate their plans for marketing. Management is the youngest of sciences and oldest of arts and consumer behaviour in management is a very young discipline. Various scholars and academicians concentrated on it at a much later stage. It was during the 1950s, that marketing concept developed, and thus the need to study the behaviour of consumers was recognised. Marketing starts with the needs of the customer and ends with his satisfaction. When everything revolves round the customer, then the study of Consumer Behaviour becomes a necessity. It starts with the buying of goods. Goods can be bought individually, or in groups. Goods can be bought under stress (to satisfy an immediate need), for comfort and luxury in small quantities or in bulk. For all this, exchange is required. This exchange is usually between the seller and the buyer. It can also be between consumers.
Definition: Consumer Behavior can be defined as “The decision-making process and physical activity involved in acquiring, evaluating, using and disposing of goods and services”.
This definition clearly brings out that it is not just the buying of goods/services that receives attention in consumer behaviour but, the process starts much before the goods have been acquired or bought. A process of buying starts in the minds of the consumer, which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. This leads to internal and external research. Then follows a process of decision-making for purchase and using the goods, and then the post purchase behaviour which is also very important, because it gives a clue to the marketers whether his product has been a success or not.
Meaning Consumer behaviour is the study of when, why, how, and where people do or do not buy product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use). Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the reaffirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management,
personalisation, customisation and one-to-one marketing. Social functions can be categorized into social choice and welfare functions. Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest.
Factors influencing consumer behavior Consumer purchases are influenced strongly by or there are four factors. 01. Cultural Factor 02. Social Factor 03. Personal Factor 04. Psychological Factor. 01. Cultural Factor :
Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Class ** Culture:o *** The set of basic values perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Culture is the most basic cause of a person's wants and behaviour. Every group or society has a
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culture, and cultural influences on buying behaviour may vary greatly from country to country. Sub Culture :*** A group of people with shared value systems based on common life experiences and situations. Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes nationalities, religions, racial group and geographic regions. Many sub culture make up important market segments and marketers often design products. Social Class:*** Almost every society has some form of social structure, social classes are society's relatively permanent and ordered divisions whose members share similar values, interests and behaviour.
02. Social Factors :
A consumer's behaviour also is influenced by social factors, such as the (i) Groups (ii) Family (iii) Roles and status ** Groups :o *** Two or more people who interact to accomplish individual or mutual goals. A person's behavious is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups. Some are primary groups includes family, friends, neighbours and coworkers. Some are secondary groups, which are more formal and have less regular interaction. These includes organizations like religious groups, professional association and trade unions. o Family:o *** Family members can strongly influence buyer behaviour. The family is the most important consumer buying organization society and it has been researched extensively. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services. o Roles and Status :o *** A person belongs to many groups, family, clubs, organizations. The person's position in each group can be defined in terms of both role and status. For example. M & "X" plays the role of father, in his family he plays the role of husband, in his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the persons around them.
03. Personal Factors :-
It includes i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v) Personality and self concept. ** Age and Life cycle Stage:o *** People changes the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle. o Occupation :o *** A person's occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. A Co. can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors. o Economic situation :o *** A person's economic situation will affect product choice o Life Style :o *** Life Style is a person's Pattern of living, understanding these forces involves measuring consumer's major AIO dimensions. i.e. activities (Work, hobbies, shopping, support etc) interest (Food, fashion, family recreation) and opinions (about themselves, Business, Products) o Personality and Self concept :o *** Each person's distinct personality influence his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment.
04. Psychological Factors :
It includes these Factors. i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes
· Motivation :o Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need · Perception :o The process by which people select, Organize, and interpret information to form a meaningful picture of the world. · Learning:-
o Changes in an individuals behaviour arising from experience. · Beliefs and attitudes :o Belief is a descriptive thought that a person holds about something o Attitude, a Person's consistently favourable or unfavourable evaluations, feelings, and tendencies towards an object or idea Consumer purchases are influenced strongly by or there are four factors. 01. Cultural Factor 02. Social Factor 03. Personal Factor 04. Psychological Factor.
01. Cultural Factor :
Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Class o Culture: The set of basic values perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Culture is the most basic cause of a person’s wants and behaviour. Every group or society has a culture, and cultural influences on buying behaviour may vary greatly from country to country. o Sub Culture : A group of people with shared value systems based on common life experiences and situations.
Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes nationalities, religions, racial group and geographic regions. Many sub culture make up important market segments and marketers often design products. Social Class: Almost every society has some form of social structure, social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests and behaviour.
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02. Social Factors :
A consumer’s behaviour also is influenced by social factors, such as the (i) Groups (ii) Family (iii) Roles and status o Groups : Two or more people who interact to accomplish individual or mutual goals. A person’s behavious is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups. Some are primary groups includes family, friends, neighbours and coworkers. Some are secondary groups, which are more formal and have less regular interaction. These includes organizations like religious groups, professional association and trade unions. o Family: Family members can strongly influence buyer behaviour. The family is the most important consumer buying organization society and it has been researched extensively. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services. o Roles and Status : A person belongs to many groups, family, clubs, organizations. The person’s position in each group can be defined in terms of both role and status.
For example. M & “X” plays the role of father, in his family he plays the role of husband, in his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the persons around them.
03. Personal Factors :
It includes i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v) Personality and self concept. o Age and Life cycle Stage: People changes the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle. o Occupation : A person’s occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. A Co. can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors. o Economic situation : A person’s economic situation will affect product choice o Life Style : Life Style is a person’s Pattern of living, understanding these forces involves measuring consumer’s major AIO dimensions. i.e. activities (Work, hobbies, shopping, support etc) interest (Food, fashion, family recreation) and opinions (about themselves, Business, Products) o Personality and Self concept : Each person’s distinct personality influence his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment.
04. Psychological Factors :
It includes these Factors. i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes Motivation :o Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need Perception :o The process by which people select, Organize, and interpret information to form a meaningful picture of the world. Learning:o Changes in an individuals behaviour arising from experience. Beliefs and attitudes :o Belief is a descriptive thought that a person holds about something o Attitude, a Person’s consistently favourable or unfavourable evaluations, feelings, and tendencies towards an object or idea
Types of Buyers: Sometimes consumer is involved with the product category but may not be necessarily involved with the particular brand or vice versa. For example, house wives know more about kitchen ware but may not know the details of various brands. According to the consumer involvement in either product or particular brand, consumer types can be divided into four categories as described below. Brand Loyals: These consumers are highly involved with both the product category and with particular brand. For example, cigarette smokers and paper readers fall in this category. Information Seekers: These buyers are involved more with product category but may not have preferred brand. They are likely to see information to decide a particular brand. For examples, air-conditioners and washing machine buyers fall under this category. Routine Brand Buyers: These consumers are not highly involved with the product category but may be involved with the particular brand with in that category. They have low emotional attachment with the product category and tied mainly with their brand. For example users of particular brand of soap for years, regular visitors to particular restaurant fall in this category. Brand Switching: Consumers in this category have no emotional attachment either with product category or any brand within it. They typically respond to price. For example stationery items, fashion products come under this category. Types of Seller When looking to gauge the real estate market, it’s important to understand the motivation behind buyers and sellers. Everyday new properties get listed, though not all for the same reasons. At the same time, new prospectors and home buyers start shopping, though their intentions will differ as well. These variables affect the asking and selling prices for homes, and should be considered if you’re in the market to buy or sell a piece of property. Will-Sell Sellers
This group of sellers will list their property for sale quite frequently, often keeping it on the market for an extended period of time at an above-market price in the hopes of landing a nice profit. These “unmotivated sellers have no sense of urgency as they have no need to sell the property, so negotiation will be difficult. Must-Sell Sellers A must-sell seller on the other hand is quite the opposite. These “motivated sellers” have a strong sense of urgency, and will often list their property at or below market prices. There is also a greater likelihood that these types of sellers will accept an offer below the listing price.
Consumer Decision Making Process:
The decision-making process consists of a series of steps which the consumer undergoes. First of all, the decision is made to solve a problem of any kind. This may be the problem of creating a cool atmosphere in your home. For this, information search is carried out, to find how the cool atmosphere can be provided, e.g. by an air-conditioner or, by a water-cooler. This leads to the evaluation of alternatives and a cost benefit-analysis is made to decide which product and brand image will be suitable, and can take care of the problem suitably and adequately. Thereafter the purchase is made and the product is used by the consumer. The constant use of the product leads to the satisfaction or dissatisfaction of the consumer, which leads to repeat purchases, or to the rejection of the product. The marketing strategy is successful if consumers can see a need which a company’s product can solve and, offers the best solution to the problem. For a successful strategy, the marketer must lay emphasis on the product/brand image in the consumer’s mind. Position the product according to the customer’s likes and dislikes. The brand which matches the desired image of a target market sells well. Sales are important and sales are likely to occur if the initial consumer analysis was correct and matches the consumer decision process. Satisfaction of the consumer, after the sales have been effected, is important for repeat
purchase. It is more profitable to retain existing customers, rather than looking for new ones. The given below gives an idea of the above discussion.
. 1. Need Recognition When a person has an unsatisfied need, the buying process begins to satisfy the needs. The need may be activated by internal or external factors. The intensity of the want will indicate the speed with which a person will move to fulfill the want. On the basis of need and its urgency, forms the order of priority. Marketers should provide required information of selling points. 2. Information Search Identified needs can be satisfied only when desired product is known and also easily available. Different products are available in the market, but consumer must know which product or brand gives him maximum satisfaction. And the person has to search out for relevant information of the product, brand or location. Consumers can use many sources e.g., neighbors, friends and family. Marketers also provide relevant information through advertisements, retailers, dealers, packaging and sales promotion, and window displaying. Mass media like news papers, radio, and television provide information. Now-a-days internet has become an important and reliable source of information. Marketers are expected to provide latest, reliable and adequate information. 3. Evaluation of Alternatives This is a critical stage in the process of buying. Following are important elements in the process of alternatives evaluation
a) A product is viewed as a bundle of attributes. These attributes or features are used for evaluating products or brands. For example, in washing machine consumer considers price, capacity, technology, quality, model and size. b) Factors like company, brand image, country, distribution network and aftersales service also become critical in evaluation. c) Marketers should understand the importance of these factors to consumers of this factor to consumers while manufacturing and marketing their products. 4. Purchase Decision Outcome of the evaluation develops likes and dislikes about alternative products or brands in consumers. This attitude towards the brand influences a decision as to buy or not to buy. Thus the prospective buyer heads towards final selection. In addition to all the above factors, situational factors like finance options, dealer terms, falling prices etc., are also considered. 5. Post- Purchase Behavior This behavior of consumer is more important as for as marketer is concerned. Consumer gets brand preference only when that brand lives up to his expectation. This brand preference naturally repeats sales of marketer. A satisfied buyer is a silent advertisement. But, if the used brand does not yield desired satisfaction, negative feeling will occur and that will lead to the formation of negative attitude towards brand. This phenomenon is called cognitive dissonance. Marketers try to use this phenomenon to attract user of other brands to their brands. Different promotional-mix elements can help marketers to retain his customers as well as to attract new customers.
COMPANY OVERVIEW OF CADBURY INDIA Cadbury began its operations in 1948 by importing chocolates and then repacking them before distribution in the Indian market. After 59 years of existence, it today has five company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkata and Chennai). The corporate office is in Mumbai
Currently Cadbury India operates in three sectors viz. Chocolate Confectionery, Milk Food Drinks and in the Candy category. In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star, Perk, Eclairs and Celebrations. Cadbury enjoys a value market share of over 70% the highest Cadbury brand share in the world! Their flagship brand Cadbury Dairy Milk is considered the "gold standard" for chocolates in India. The pure taste of CDM defines the chocolate taste for the Indian consumer
In the Milk Food drinks segment their main product is Bournvita - the leading Malted Food Drink (MFD) in the country. Similarly in the medicated candy category Halls is the undisputed leader. The Cadbury India Brand Strategy has received consistent support through simple but imaginative extensions to product categories and distribution. A good example of this is the development of Bytes. Crispy wafers filled with coca cream in the form of a bagged snack, Bytes is positioned as "The new concept of sweet snacking". It delivers the taste of chocolate in the form of a light snack, and thus heralds the entry of Cadbury India in to the growing bagged Snack Market, which has been dominated until now by Salted Bagged Snack Brands. Bytes was first launched in South India in 2003. Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India. For over two decades, it has worked with the Kerala Agriculture University
to undertake cocoa research and released clones, hybrids that improve the cocoa yield. Today, Cadbury is poised in its leap towards quantum growth and new categories of business, namely gums, mints, snacking and gifting. It is a part of the Cadbury Schweppes Group, world's No.1 Confectionery Company RESEARCH METHODOLOGY The data had been used to cover various aspects like consumption, consumer’s preference and customer’s satisfaction regarding Cadbury and Nestle chocolates. In collecting requisite data and information regarding the topic selected Survey design: The study is a cross sectional study because the data were collected at a single point of time. For the purpose of present study a related sample of population was selected on the basis of convenience. Sample Size and Design: A sample of 100 people was taken on the basis of convenience. The actual consumers were contacted on the basis of random sampling.
Research Period:
Research work is only carried for 2 or 3 weeks. Research Instrument: This work is carried out through self-administered questionnaires. The questions included were open ended, dichotomous and offered multiple choices Data Collection: The data, which is collected for the purpose of study, is divided into 2 bases: Primary Source: The primary data comprises information survey of “Comparative study of consumer behavior towards Nestle and Cadbury chocolates”. The data has been collected directly from respondent with the help of structured questionnaires. Secondary Source: The secondary data was collected from internet, References from Library. Data Analysis: The data is analyzed on the basis of suitable tables by using mathematical techniques. The technique that I have used is bar technique
Cadbury Plc
Strengths High financial strength (Sales turnover 1997, £7971.4 million and 9.4%)
Strong manufacturing competence, established brand name and leader in innovation.
Advantage that it is totally focused on chocolate, candy, chewing gum, unique understanding of consumer in these segments. Successfully grown through its acquisition strategy. Recent acquisitions, including Adams 2003, enabled it to expand into important markets like the US market. Weaknesses The company is dependent on the confectionery and beverage market, whereas other Competitors e.g. Nestle have a more diverse product portfolio, where profits can be used to invest in other areas of the business and R&D. Other competitors have greater international experience - Cadbury has traditionally been strong in Europe. New to the US, possible lack of understanding of the new emerging markets compared to competitors.
Opportunities New markets and Significant opportunities exist to expand into the emerging markets of China, Russia, India, where populations are growing, consumer wealth is increasing and demand for confectionery products is increasing. The confectionery market is characterized by a high degree of merger and acquisition activity in recent years. Opportunities exist to increase share through targeted acquisitions Key to survival within the FMCG market is increasing efficiency and reducing costs. Cadbury Fuel for Growth and cost efficiency programs seek to bring cost savings by: 1) Moving production to low cost countries, where raw materials and labour is cheaper 2) Reduce internal costs - supply chain efficiency, global sourcing and procurement, and wise investment in R&D. Innovation is key driver. To respond to changes in consumer tastes and preferences - healthier snacks with lower calories need to be developed. R&D and product launches have led to sugar-free & center filled chewing gum varieties and Cadbury premium indulgence treat. Low-fat, organic and natural confectionery demand appears strong.
Threats: Worldwide - there is an increasingly demanding cost environment, particularly for Energy, transport, packaging and sugar. Global supply chain in low cost locations. Competitive pressures from other branded suppliers (national and global). Aggressive price and promotion activity by competitors - possible price wars in developed markets. Social changes - Rising obesity and consumers obsession with calories counting. Nutrition and healthier lifestyles affecting demand for core Cadbury products
Questionnaire
Survey for chocolate brands 1. Which age group do you belong to? Below 15 15 to 25 25 to 40 Above 40
2. Which chocolate brand do you normally consume?
Nestle Cadburys Others Foreign brands 3. What is your average monthly spending on chocolates? Below 50 50 to 100 100 to 200 Above 200
4. What do u like the most in Cadbury Chocolates? Taste Wide Range Easily Available Any Other Reason 5. If Cadburys, then which is the first brand that comes to your mind? Dairy Milk 5Star Temptation Perk Celebration Any other Cadburys Brand 6. On what occasions would you gift chocolates? Diwali Raksha Bandhan Birthday Valentine’s Day Anniversary Others
Suggestion: Results and Analysis of the Survey A survey was carried out by us in order to find out the reach of Cadburys in India. The chocolate. Consumers were asked questions like the chocolate brand that they normally eat, and the features that they look for in a chocolate etc. The chocolate consumers had ranked Cadburys as the best chocolate brand and a few consider Nestle as a good chocolate brand. We also observed that Cadburys is facing strong competition from foreign brands. This could be due to the fact that the respondents of our survey were mostly the well to do population from the IT sector. We had 47 respondents to our survey. Most of the respondents were from the 15-25 and 25-40 age groups. Most of the respondents spent more than 100 rupees on chocolates in a month. Almost 70% people rated Dairy Milk the most consumed chocolate closely followed by 5 star and Perk. Also the reason why dairy milk was preferred was because of the taste. 66% people preferred to gift celebrations for many occasions as against 23% who prefer gifting foreign chocolates. Thus we understood better the chocolate market in India. Cadbury’s has a very good market share currently but will have to constantly revamp their strategies in order to compete with the foreign brands.
Cadbury’s Market Reach
Information Search and Decision Making Problem Recognition.? One model of consumer decision making involves several steps. The first one is problem recognition??ou realize that something is not as it should be.? Perhaps, for example, your car is getting more difficult to start and is not accelerating well.??? The second step is information search??hat are some alternative ways of solving the problem?? You might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi, or ride a skateboard to work.? The third step involves evaluation of alternatives.? A skateboard is inexpensive, but may be ill-suited for long distances and for rainy days.?? Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a product to the store because you did not find it satisfactory).? In reality, people may go back and forth between the stages.? For example, a person may resume alternative identification during while evaluating already known alternatives.
Consumer involvement will tend to vary dramatically depending on the type of product.? In general, consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are highly significant in the consumer?? life in some other way (e.g., a word processing program or acne medication). It is important to consider the consumer?? motivation for buying products.? To achieve this goal, we can use the Means-End chain, wherein we consider a logical progression of consequences of product use that eventually lead to desired end benefit.? Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of power, which ultimately improves the consumer?? self-esteem.? A handgun may aim bullets with precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm the consumer?? family, which achieves the desired end-state of security.? In advertising, it is important to portray the desired end-states.? Focusing on the large motor will do less good than portraying a successful person driving the car. Information search and decision making.? Consumers engage in both internal and external information search.?
Internal search involves the consumer identifying alternatives from his or her memory.? For certain low involvement products, it is very important that marketing programs achieve ??op of mind?? awareness.? For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer must be able to retrieve one?? restaurant from memory before it will be considered.? For high involvement products, consumers are more likely to use an external search.? Before buying a car, for example, the consumer may ask friends?? opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships.? Thus, firms that make products that are selected predominantly through external search must invest in having information available to the consumer in need??.g., through brochures, web sites, or news coverage. A compensatory decision involves the consumer ??rading off?? good and bad attributes of a product.? For example, a car may have a low price and good gas mileage but slow acceleration.? If the price is sufficiently inexpensive and gas efficient, the consumer may then select it over a car with better acceleration that costs more and uses more gas.? Occasionally, a decision will involve a noncompensatory strategy.? For example, a parent may reject all soft drinks that contain artificial sweeteners.?? Here, other good features such as taste and low calories cannot overcome this one ??on-negotiable?? attribute. The amount of effort a consumer puts into searching depends on a number of factors such as the market (how many competitors are there, and how great are differences between brands expected to be?), product characteristics (how
important is this product?? How complex is the product?? How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in analyzing product characteristics and making the best possible deal?), and situational characteristics (as previously discussed). Two interesting issues in decisions are:
Variety seeking (where consumers seek to try new brands not because these brands are expected to be ??etter?? in any way, but rather because the consumer wants a ??hange of pace,?? and ??mpulse?? purchases??nplanned buys. This represents a somewhat ??uzzy?? group.? For example, a shopper may plan to buy vegetables but only decide in the store to actually buy broccoli and corn.? Alternatively, a person may buy an item which is currently on sale, or one that he or she remembers that is needed only once inside the store.
A number of factors involve consumer choices.? In some cases, consumers will be more motivated.? For example, one may be more careful choosing a gift for an inlaw than when buying the same thing for one self.? Some consumers are also more motivated to comparison shop for the best prices, while others are more convenience oriented.? Personality impacts decisions.? Some like variety more than others, and some are more receptive to stimulation and excitement in trying new stores.? Perception influences decisions.? Some people, for example, can taste the difference between generic and name brand foods while many cannot.? Selective perception occurs when a person is paying attention only to information of interest.? For example, when looking for a new car, the consumer may pay more attention to car ads than when this is not in the horizon.? Some consumers are put off by perceived risk.? Thus, many marketers offer a money back guarantee.? Consumers will tend to change their behavior through learning??.g., they will avoid restaurants they have found to be crowded and will settle on
brands that best meet their tastes.? Consumers differ in the values they hold (e.g., some people are more committed to recycling than others who will not want to go through the hassle).? We will consider the issue of lifestyle under segmentation.
Families and Family Decision Making The Family Life Cycle. Individuals and families tend to go through a "life cycle:" The simple life cycle goes from
For purposes of this discussion, a "couple" may either be married or merely involve living together. The breakup of a non-marital relationship involving cohabitation is similarly considered equivalent to a divorce. In real life, this situation is, of course, a bit more complicated. For example, many couples undergo divorce. Then we have one of the scenarios:
Single parenthood can result either from divorce or from the death of one parent. Divorce usually entails a significant change in the relative wealth of spouses. In some cases, the non-custodial parent (usually the father) will not pay the required child support, and even if he or she does, that still may not leave the custodial parent and children as well off as they were during the marriage. On the other hand, in some cases, some non-custodial parents will be called on to pay a large part of their income in child support. This is particularly a problem when the noncustodial parent remarries and has additional children in the second (or subsequent marriages). In any event, divorce often results in a large demand for:
Low cost furniture and household items Time-saving goods and services
Divorced parents frequently remarry, or become involved in other non-marital relationships; thus, we may see
Another variation involves
Here, the single parent who assumes responsibility for one or more children may not form a relationship with the other parent of the child. Integrating all the possibilities discussed, we get the following depiction of the Family Life Cycle:
Generally, there are two main themes in the Family Life Cycle, subject to significant exceptions:
As a person gets older, he or she tends to advance in his or her career and tends to get greater income (exceptions: maternity leave, divorce, retirement). Unfortunately, obligations also tend to increase with time (at least until one’s mortgage has been paid off). Children and paying for one’s house are two of the greatest expenses.
Note that although a single person may have a lower income than a married couple, the single may be able to buy more discretionary items. Family Decision Making. Individual members of families often serve different roles in decisions that ultimately draw on shared family resources. Some individuals are information gatherers/holders, who seek out information about products of relevance. These individuals often have a great deal of power because they may selectively pass on information that favors their chosen alternatives. Influencers do not ultimately have the power decide between alternatives, but they may make their wishes known by asking for specific products or causing embarrassing situations if their demands are not met. The decision maker(s) have the power to determine issues such as:
Whether to buy;
Which product to buy (pick-up or passenger car?); Which brand to buy; Where to buy it; and When to buy.
Note, however, that the role of the decision maker is separate from that of the purchaser. From the point of view of the marketer, this introduces some problems since the purchaser can be targeted by point-of-purchase (POP) marketing efforts that cannot be aimed at the decision maker. Also note that the distinction between the purchaser and decision maker may be somewhat blurred:
The decision maker may specify what kind of product to buy, but not which brand; The purchaser may have to make a substitution if the desired brand is not in stock; The purchaser may disregard instructions (by error or deliberately).
It should be noted that family decisions are often subject to a great deal of conflict. The reality is that few families are wealthy enough to avoid a strong tension between demands on the family’s resources. Conflicting pressures are especially likely in families with children and/or when only one spouse works outside the home. Note that many decisions inherently come down to values, and that there is frequently no "objective" way to arbitrate differences. One spouse may believe that it is important to save for the children’s future; the other may value spending now (on private schools and computer equipment) to help prepare the children for the future. Who is right? There is no clear answer here. The situation becomes even more complex when more parties—such as children or other relatives—are involved. Some family members may resort to various strategies to get their way. One is bargaining—one member will give up something in return for someone else. For example, the wife says that her husband can take an expensive course in gourmet cooking if she can buy a new pickup truck. Alternatively, a child may promise to walk it every day if he or she can have a hippopotamus. Another strategy is
reasoning—trying to get the other person(s) to accept one’s view through logical argumentation. Note that even when this is done with a sincere intent, its potential is limited by legitimate differences in values illustrated above. Also note that individuals may simply try to "wear down" the other party by endless talking in the guise of reasoning (this is a case of negative reinforcement as we will see subsequently). Various manipulative strategies may also be used. One is impression management, where one tries to make one’s side look good (e.g., argue that a new TV will help the children see educational TV when it is really mostly wanted to see sports programming, or argue that all "decent families make a contribution to the church"). Authority involves asserting one’s "right" to make a decision (as the "man of the house," the mother of the children, or the one who makes the most money). Emotion involves making an emotional display to get one’s way (e.g., a man cries if his wife will not let him buy a new rap album).
Strengths
Strong bottom line- shareholder friendly Free Cash Flow-to-Sales of 15% attracting investors Market share of 45% in US, dominance in LA, and strong growth in Europe and Asia providing diverse rev streams. Strong brand image
Weaknesses
Product recalls Highly leveraged Low on Innovation- a follower
Threats Opportunities
Restructuring initiatives Growing global oral hygiene market Tapping Personal Care in Asian markets like India Hispanic population in the US
Competitive landscape from other CPGs Private label growth Increasing commodity prices Increasing number of Competitors
