Download Bi = ideal brand

A TRAINING PROGRAM IN MARKETING
CONSUMER BEHAVIOURS
IMPERIAL TOBACCO LIMITED
INTRODUCTION
Why is it important for us to look at consumer studies and behaviour? Why is describing the
consumers within a market in sociodemographic terms alone not enough?
The answer to the above questions may be found in the very essence of marketing. One of
the basic functions of marketing is meeting consumer needs. At ITL we must accurately
identify and fully understand these needs in order to create a product that fulfils a specific
need or to position a product in terms of a specific segment of the population. This is,
however, easier said than done. If we wish to position our products properly, we must have a
good description of all consumers (ours as well as oppositions') and must also know why
those consumers will or will not buy a product.
The analysis of consumer behaviour given here is based on the postulate that consumers
always base their decisions on a certain amount of information. This information may be
divided into two categories : internal (previous experience) and external. Nature of the
product, package, image, communication, visibility, word of mouth, etc. Let's consider three
consumers who are walking out of a convenience store with a new pack of Player's smooth.
The first one bought it without any formal processing of information. Past habits (internal
information) generated a routinized behaviour. The second, who was about to purchase a
pack of Player's light, got attracted to the brushing on a Player's pack he had not noticed
before. The name "smooth" on the pack rang a bell since he was looking for a product that
could reduce the level of irritation. In this second case, the consumer went through a more
formal processing of information by which external information was used. According to this
postulate, a company could not effectively market a product without a good understanding of
the type of information consumers used to make purchasing decisions and the way in which
the information is perceived and used; in other words, the decision or decision-making
processes.
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The processes involved in making a decision are greatly influenced by three major types of
variables: variables related directly to consumers themselves; variables related to the buying
context or situation; and, lastly, variables concerning the products being considered. These
three variables form the "basic triad." A large part of this paper deals with the decisionmaking processes adopted by consumers and the many ways in which the information they
are apt to use is actually processed.
1.
INDIVIDUAL—PRODUCT—SITUATION: THE BASIC TRIAD
One of the basic principles of consumer behaviour is the triad individual—product—
situation. This principle stipulates that the dynamics of a market or even a market segment
can only be understood if the consumer, the product purchased and the buying situation are
all taken into consideration.
Only then can the tremendous wealth and complexity of
consumer behaviours be appreciated.
If two consumers, for example, are long time
consumers of duMaurier Light, it would obviously be tempting to think that they are similar
and that their future behaviours would be similar too. Yet, what if the first consumer is a
"loyal" consumer because the product is, at the present time, the less irritating one she knows
of while the other one perceives the product to be very much part of his own self-concept? In
comparison to the second consumer, the first one is more susceptible to be an active
information seeker. His likelihood to switch for an even lighter product is high. On the other
hand, our second consumer could also change his behaviour. In that case, major modification
in the image of duMaurier Light, caused by a major modification in our promotional strategy,
could prompt such a change.
These two cases reveal how the consumer-product relationship can be different. As a result,
any corporate strategy drawing on consumer loyalty would necessarily be different for each
case.
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In short, to understand how and why consumers behave as they do, their decision-making
processes must be studied along with the various criteria they use. Indeed, these processes
would be difficult to explain without looking at the individual product and buying situation.
These two elements will be studied more closely in upcoming sections. Figure 1 outlines the
main elements used in analyzing consumer behaviours and may clarify the many ideas
presented in the next few pages.
Figure 1
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2.
INDIVIDUAL VARIABLES
2.1
Involvement
5
Of all the consumer variables, product involvement is by far the most important.1 Even
though researchers2 in this area have defined involvement in different ways over the years
according to research trends popular at the time, the consensus is that the term may be
understood as the feeling of importance or personal interest associated with the product in a
given situation.
Involvement may, therefore, be considered a reflection of the importance of a specific product
for an individual in a given situation. Involvement may be structural or conjonctural; i.e.
linked to the situation.
Whether involvement is related to an individual's interest in one product or an entire category
of products, involvement is largely a function of the risk that consumers associate with the
purchase or use of a product or service. The riskier the purchase or use of the product, the
greater the consumer's involvement. There are several types of consumer risks. They are not
mutually exclusive, yet may well exist independently.
The main risks influencing the
purchase of a product are functional, economical, psychological and social.
1
C.W. PARK and B. MITTAL, "A Theory of Involvement in Consumer Behavior: Problems and
Issues," in Jagdish Sheth Research in Consumer Behavior, vol. 1, Jai Press Inc., 1985, pp. 201-232.
2
J. NANTEL and R. ROBILLARD, "Le concept de l'implication dans l'étude des comportements des
consommateurs: une revue de la littérature," Cahier de recherche 90-01, Montréal, École des Hautes
Études Commerciales, 1990.
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Functional Risk
This type of risk may be defined as the possibility that the product does not meet the
consumer's expectations. A consumer can, however, reduce functional risk dramatically by
seeking as much information as possible about the product. Given the "relative" low cost of
trying a new tobacco product, product trial will usually be the best source of information. A
new product is launched, the package, the name, the T and N levels will say something to the
consumer. Those information will be used by consumer in order to decide if they want to try
the product or not. Ultimately, this trial will be the basis upon which adoption will or will not
happen. Thus, the initial gathering of information as well as the trial represent a procedure by
which consumers are trying to reduce the functional risk of adopting a new product.
Economic Risk
This risk is the easiest to understand since the more expensive the product, the more
complicated the decision-making process. Of course, this relationship may be alleviated by
the consumer's income level, but may also be affected by the perception of total expense.
Since 1990 the continuous increases in the level of taxation of tobacco products have pushed
the price of manufactured cigarettes so high that the economic risk is now very much part of
the decision-making process of consumers. Whether it is the new types of "RYO" products
or alternative distribution channels, consumers are investing more time in order to find a
product that would satisfy them but at a lower price. In other words, the price of tobacco
products has increased consumers' level of involvement by increasing the level of economic
risk they perceive. In turn, those consumers are more active in seeking information.
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Psychological risk
This risk may be defined as the risk related to the purchase or consumption of a product that
does not correspond to the consumer's desired self-image. The image and the positioning we
give to each of our families are very much related to the notion of psychological risk. How
would loyal consumers of Player's products react to a green pack? How would they react to
the name Player's being associated with opera? Those questions are important because they
are dealing with psychological risk associated with the possession or consumption of a brand.
The more you increase such a risk, the more you are forcing your consumer to be an active
information seeker. If this happens amongst your loyal consumers then their likelihood
switching to another brand has been increased.
Just like the other forms of risk,
psychological risk increases the complexity of the consumer's decision-making processes.
Social Risk
Psychological risk is related to the individual consumer's self image, whereas social risk is
related to the image others have of the individual. Naturally, this risk is not present for all
consumers. In fact, social risk is only present in cases where the form of consumption is
visible or the consumers are aware of their environment.
2.2
Experience
Experience, like consumer involvement, has an important impact on the complexity of the
decision-making processes used.
The broader the experience, the shorter the decision-
making process. A consumer who has been buying Matinée light for the last five years and
who is satisfied with it will not have a decision-making process. In that case, her behaviour
will be routinized. Now, this equation is automatic only if the previous experience was
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satisfactory. In fact, a negative experience can also accelerate the decision-making process,
albeit negatively.
Experience affects the complexity of the decision-making processes that consumers use
because consumers categorize their previous experiences into subsets of possibilities that are
known, unknown, retained or rejected. Figure 2 shows how this classification process
according to the model presented by Brisoux-Larouche.
Figure 2
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This model is particularly interesting in that it illustrates how consumers form or change their
consumption habits, past experiences, as well as prior treatment of information, have allowed
consumers to position, in their mind, each brand that they know of. In turn, this positioning
of brands forms the perceptual maps that guides consumers' choices as well as managers'
strategies. A good comprehension of such maps is essential if we want to launch a brand
extension, reposition an existing product or assess the risk of losing consumers.
3.
THE MAIN DECISION-MAKING PROCESSES
The different elements seen so far provide the framework for an intelligent discussion of the
types of decision-making processes which might explain a consumer's decision to buy or
consume a product or a brand. It cannot be emphasised enough that a marketing manager
must understand the processes used by consumers in evaluating the many products a
company may offer. The better the marketing manager's grasp of these processes, the better
the company's marketing strategies. Figure 2 details the main decision-making processes
used and some of the variables that characterise them.
In order to put all the pieces of the processes together, each one is described individually in
the pages that follow.
Attitude
A decision-making process composed of attitude requires both tremendous experience and
involvement in the particular brand or product. Behaviours of consumers who are not only
loyal to Player's products but who also are interested in derivative products such as Player's
jackets imply a high level of involvement.
Attitude represents a particularly effective
mechanism that allows the consumer to reach a decision simply, quickly and effectively using
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positive past experiences and the ensuing personal judgement.
The consumer's positive attitude is a precious asset to the organisation. Since it is difficult to
change an attitude based on previous experience, this same mechanism may be a doubleedged sword that favours the organisation benefiting from the attitude and actually blocks
opposition. The long-lasting influence of attitude as a mechanism can be explained by the
bias it creates in the individual's perceptions.
There are attitudes towards products perceived as a whole (Player's or duMaurier products)
and attitudes towards the components of a product (tradition, masculinity, irritation, etc.).
This nuance is vital to a full understanding of an attitude and how it was formed. Most
attitudes are based on previous experiences which may originate in a subordinate process,
cognitive process or affective process. In fact, these processes are rarely of one single type.
Usually they represent a combination of types. Often an attitude is related to a learned
mechanism of unknown origin. For example, why does a shopper not like yellow? One of
these mechanisms is classic conditioning, through which a neutral stimulus becomes
associated with an emotionally charged one. This concept is readily employed in advertising,
especially when a celebrity is used to sell a product. The emotional charge associated with
the star is transferred to the product or neutral stimulus. Products associated with special
events are an excellent example of the way by which attitudes can be created or maintained.
The Cognitive Processes
In the case of products that require a high degree of involvement, the inexperienced consumer
tends to use cognitive decision-making processes. Both more lengthy and more complex,
these processes require some judging of the various attributes and benefits of the products
offered. In making her choice, the would-be consumer considers the various benefits she
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judged important. By weighting each attribute in terms of importance and by judging each
choice according to these attributes, the consumer could objectively and rationally make an
optimal choice. This approach is known in marketing as the "linear compensatory model of
decision-making." As shown in Table 1, this approach requires a technique that is both
accurate and exhaustive.
Table 13
3
Masculinity
Popularity
Irritation
Strength
Player's Light
7
9
8
6
(20)
Export'A Light
6
5
9
3
(45)
duMaurier Light
4
7
7
6
(30)
Player's Smooth
7
7
5
5
(6)
Export'A Smooth
8
3
5
4
(26)
Ideal Brand
7
9
5
5
Importance
3
3
5
5
Evaluations of brands are based on scales ranging from 1 (low) to 9 (high). Importance of attributes are
based on scales ranging from 1 (high) to 5 (low).
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For a consumer who considers the five brands presented in Table 1, the decision-making
process would be formulated as follows
n
Ap =

Bap - Bai
Ia 1
i=1
where
ap
=
attribute or benefit of the brands considered
Bp
=
brand under evaluation
Bi
=
ideal brand
Ia
=
importance of attribute a
B ai
=
evaluation of a given brand upon a certain attribute
Ap
=
attitude towards brand p.
Using this model, our consumer's final choice would be the one that minimised the value of
A p 2. In this case, the results obtained are
Player's Light
│ (7 - 7) 3 + (9 - 9) 3 + (8 - 5) 5 + (6 - 5) 5 │*
=
20
Export'A Light
45
duMaurier Light
30
Player's Smooth
6
Export'A Smooth
26
*
Differences are always in absolute (positive) terms.
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Based on these results, this consumer should choose Player's Smooth because, given the
attributes he is considering, as well as the evaluations he makes of the various offerings, this
brand is the closest to what his ideal brand would be. His choice can be explained by the fact
that he is mainly concerned with a product that would be considered middle of the road in
terms of irritation and strength while providing a high degree of popularity.
As this example shows, identifying and understanding these processes are key steps for any
manager in targeting a specific clientele. By knowing the benefits or attributes desired or
considered important by the consumer, a marketing manager can adjust the current marketing
mix accordingly. This, in essence, is what the image study calls for. From the information
thus provided we can reposition a brand. This can be done by a modification of the rec...??,
or a modification of it's image. In this last case, the perception of a brand's popularity can be
modified by the visibility we give to that brand, thus the concept of dominance. The
perception of a brand youthfulness or masculinity can in turn be modified by the sponsorship
activities we associate it with.
Naturally, understanding sophisticated cognitive processes, such as the linear compensatory
model, is only useful if consumers are actually using them. Interestingly enough, this is not
always the case. Several decisions are not based on such processes and thus, cannot be
changed or modified using a "cognitive" type of strategy. This is why, in order to get a full
understanding of the decision-making processes that could be used by consumers, we should
consider additional mechanisms.
These are called subordinate processes and affective
processes.
Subordinate Processes
A consumer with a high level of involvement in a product yet very little experience may use a
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cognitive decision-making process. But if the consumer either lacks or feels lacking in time
or ability to absorb product information, this consumer will usually opt for a subordinate
process. Decisions will then be based on imitation, recommendation or compliance. In all of
the above cases, the decision-making process (or a part of it) is subordinated to a third party.
If this mechanism is to work, that third party must be credible from the consumer's point of
view.
Often the source of compliance or imitation is a friend or relative, hence the
determining influence of the reference group in terms of buying a given brand.
The Affective Processes
The decision-making processes presented thus far are really based upon the consumer as a
cognitive being who analyses the various characteristics of a product to optimise its
consumption of that product. This concept, based on a utilitarian view of the decisionmaking processes used by consumers, dominates marketing theory, but does not preclude a
review of other approaches. Holbrook and Hirschman4 have suggested that some products
are not bought on the basis of objectively viewed features or specific functions. Instead, their
purchase forms a total experience. This is the experiential view. That experience is an
attempt at hedonistic gratification. As a decision-making process, the total experience relies
heavily on emotional elements (love, hate, joy, boredom, fatigue, etc.) rather than on the
cognitive elements of product features and benefits. Most decision-making processes are
neither entirely cognitive nor entirely affective. Instead they are a blend of both processes.5
In any event, a marketer should be well aware of this affective dimension.
4
M. HOLBROOK and E.C. HIRSCHMAN, "The Experiential Aspects of Consumption: Consumer
Fantaisies, Feelings, and Fun," Journal of Consumer Research, vol. 9, 1982, pp. 132-140.
5
P. ANAND, M. HOLBROOK and D. STEPHEN, "The Formation of Affective Judgments: The
Cognitive-Affective Model Versus the Independence Hypothesis," Journal of Consumer Research, vol.
15, December 1988, pp. 386-391.
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Habit
Habit is another decision-making mechanism used by consumers. Rather like attitude, habit
allows a consumer to decide on a product quickly. Unlike attitude, habit is characterized by a
low level of involvement. The following example highlights this distinction. Mrs. Smith has
a strong positive attitude towards Matinée. She buys it automatically every week. Miss
Jones does the same, although with a lesser degree of involvement. One day the gas bar
where both women shop stops carrying Matinée.
Given Mrs. Smith's high level of
involvement, she might decide to shop elsewhere, to not buy cigarettes or to pick another
brand after analyzing the features of similar products. On the other hand, Miss Jones is likely
to substitute another brand of cigarettes much more mechanically.
In short, habit provides consumers with an easy, routine way of selecting a product or
category of products whose purchase or consumption represents very little risk. Since most
tobacco products, however, represent a high level of involvement, habit is a less frequent
decision-making mechanism.
Impulse Buying
The decision-making process used by the consumer buying on impulse is characterized by a
low degree of involvement and experience. These purchases are generally unplanned and of
little consequence. Sometimes in-store displays or packaging of the product are enough to
prompt the consumer to buy.
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4.5
17
Situational Variables
As seen in Figure 1, the decision-making processes, along with the related information
processing strategies, are influenced by certain situational variables; e.g., month, day, season
when the purchase is made. Other variables include the time the consumer has to shop for
this purchase, the presence or absence or reference groups, the economy and the place where
the decision is made.
Time
The amount of time a consumer has to make a decision influences the decision-making
process adopted. If there is little time, the consumer will rely more on subordinate processes
and processes based on past experience.
Reference Groups
The presence or absence of reference groups also influences the decision-making process. If
a consumer is aware of signals in his/her environment and must make a decision, then the
presence of a reference group or person of influence will increase the consumer's tendency to
use a subordinate process.
Economic Climate
The economic climate plays an important role too. If the consumer is living through a
recession or is keenly aware of the economic situation, he/she wil tend to use a cognitive
decision-making process in which price becomes more significant.
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Place
The physical environment is another element influencing the consumer's choice of a decisionmaking process. This last factor is especially important since the presence or absence of
affective/cognitive stimuli would determine the process used.
CONCLUSION
As mentioned at the beginning of this chapter, every decision-making process is based on a
minimum amount of information. Consequently, a key function of marketing is to provide
consumers with information that may be adapted to either the type or the structure of the
decision-making process selected. Naturally, the more experience related to the purchase of
this product or category of products a consumer has, the less interested the consumer will be
in seeking information from outside sources and in responding to a marketing appeal. This is
exactly what a new brand faces when it targets the consumers of an already established brand.
This is why a good grasp of the decision-making processes used by consumers in the act of
purchasing a product gives a marketing manager information about how the consumer
processes the information gathered. The manager is thus equipped to choose more suitable
marketing strategies for the particular product. Naturally, any understanding of the decisionmaking processes used by consumers can only be gained through analysis of the different
variables that influence the processes; these variables have been described
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throughout this paper. This understanding would, in turn, enable the company to do the
following:
1)
better segment its markets;
2)
better position the company's products vis-à-vis the competition and the segments
targeted;
3)
select more suitable distribution modes and networks;
4)
set up a price structure based not only on costs or competitors' prices, but also on the
target consumer's perception;
5)
lastly, develop a communications strategy that provides consumers with the
information they want in the most suitable form.
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