Monday, June 13, 2016
Ducati - Consumer Decision Making Process
The Consumer’s decision making process is based upon how they conduct themselves when purchasing products or services. The decisions they make are laid out into five steps. Before the steps however, there are some other factors that can be taken into account. The first factor to take into account is psychological factors. This influences the consumer’s decision and is based upon a person’s personality traits. It’s these traits like self-confidence, dominance, sociability, defensiveness, adaptability, and aggressiveness that help decide whether the consumer will go through with the decision making process in the first place. The traits also help determine different feelings toward products and services and ultimately shape what type of buyer you are. “The relationship of basic personality variables to buying behavior has been investigated across a fairly wide range of products and services. In probably the best-known such study, Franklin B. Evans used the Edwards Personal Preference Schedule to test for personality differences between Ford and Chevrolet owners. His basic conclusion was that personality is of little value in predicting whether an individual owns a chevrolet or Ford” (Thomas et al., 1969). Although Evans discovered that there was little contribution from a personality point of view; researchers later on found that individual personality types would have a profound impact when conducting the decision make process. When comparing the Ducati Superbike to its competitors we get a similar picture to Evan’s study with the Ford and the Chevrolet. With the Ducati However, there is a predominantly different target market. The Ducati is a top of the line motorcycle that attracts thrill seekers all around the world who want to feel the roar of the italian made engine. Straight off the cuff Ducati customers are prepared to pay more for a premium product as they feel the need to want to push their thrills to the limit.
The buyer decision making process is split up into 5 steps. Need recognition, Information Search, Evaluation of Alternatives, Purchase Decision, and Post-Purchase Behaviour. This is the order in which a consumer will typically run through when making a purchase of some sort. Needs Recognition is the first step in the consumer decision making process and occurs when the consumer feels that are not satisfied and a need must be filled. Consumer’s feel that they need products and services in their life to fulfil certain needs, such as entertainment and pleasure. The first stage is considered ‘the problem stage’, as the need or want is missing and the product or service is ‘the fix’ to the problem. Someone who has a strong desire to buy the Ducati Superbike will be willing to pay extra because they feel that their need is worth the cost of the bike’s superior design and quality. Once the consumer has figured out that they need the Super Bike they move onto the second stage of the buyer’s decision making process. Information search is the second stage and consists of the need (Ducati Superbike) and also the alternative options or competitors in the market. In this case the Ducati is a speciality item that does not have many competitors, however, you can compare the Ducati Superbike to a Supercar like a Ferrari Lamborghini. If someone is willing to pay a large amount for the superbike they are probably also likely to purchase a fast car as well. This alternative product has a similar need to the Ducati Super bike.
The third stage involves evaluating the options or alternatives and outlines the differences of each options and the benefits of each as compared to each other. “So how does a consumer choose among these alternatives? The truth is that there are several processes at work inside the consumer's mind, forming beliefs and attitudes about all of the products to choose from. However these processes all "evolve" based on the individual's buying situation. The situation evolves from the set of attributes the consumer is choosing to evaluate products by” (The Market Media Life, 2015). “An Evaluation of Alternatives is the stage of the buyer decision process in where a consumer uses the information gathered in the Information Search to evaluate alternative brands in the product category” (The Market Media Life, 2015). When it comes to buying a Ducati you cannot undermine their superior quality and performance. “The Ducati Superbikes are the most advanced, most powerful twin-cylinder motorcycles ever built. They are the product of a team of designers and engineers who have combined their Ducati Motogp and World Superbike technologies to create the finest sport bikes in the world. From race-level engine specifications to World Championship-winning traction control, the results are pure excellence” (Fraser Motorcycles, 2011).
The fourth step of the consumer buyer decision making process is the actual purchase decision itself. The decision comes down to the previous three steps deducting your options down to one and considering you're motivated enough and still have the need to buy the purchase will take place. “The decision will depend on the information and the selection made in the previous steps based on the perceived value, product’s features and capabilities that are important to the consumer” (The Consumer Factor, 2011). The actual final decision still depends on other external factors like the quality of service from the place of purchase, the return policy and also any existing promotions for the product. Ducati is renowned for their great customer service. “In April of 2015 was the best sales month in Ducati's history. The company delivered 7,309 units to customers. For that kind of duty, the Ducati delivers the best combination of style and fun at a reasonable cost” (MacDonald, 2015).
After the purchase there is a post purchase evaluation which looks at the “original needs (those who caused the buying behaviour). And whether he has made the right choice in buying this product or not” (The Consumer Factor, 2011). The consumer will most likely feel a sense of satisfaction for the product and the choice, or otherwise feel disappointed with the product. If the product has satisfied the need and the consumer is satisfied with the final product then he or she will minimise the stage of information search. This is because there is no need to go back and look for other products to fulfill that need. However, if the consumer was dissatisfied then they will need to repeat the 5 stages of the consumer buying decision process with alternative products so that they can fulfill that need properly. “Positive or negative, consumers will also be able to share their opinion on the brand. Whether in their family or by word-of-mouth. Or on a much broader scale now with social networks or on consumer product review websites. A tendency not to be overlooked because now with the Internet, an unhappy customer can have a strong power to harm for a brand” (The Consumer Factor, 2011). The importance for companies like Ducati to have the proper awareness of influencing the consumer in a positive manner is paramount to the buyer’s final decision. If the customer service is sub-par then the customer might think twice before purchasing the product. “That’s why it’s important for companies to optimize the customer experience, a guarantee an efficient customer service and a specific call centre are some of the assets that can be developed to improve post-purchase behaviour if there is any trouble with the product” (The Consumer Factor, 2011). Companies with a successful history like Ducati are renowned for their products quality and unique design. Ducati makes some of the best looking motorbikes with the most powerful engine in the world. This sets them apart from their competitors and allows the consumers to be sure they are purchasing a higher quality motorbike for the higher premium. “At Ducati, interest in business-to-business trade is slow because 85 percent of Ducati components are self-designed and ordered from suppliers in the Bologna region. But a percentage of parts, including spark plugs, chains, tires and lamps, may be purchased by joining Moto clusters, an online procurement system for the motorcycle industry that was set up last year by Giuseppe Narducci, Ducati's former head of purchasing” (Tagliabue, 2001). The Ducati Traction Control (DTC) system further underlines Ducati's technology flow from racing to production and demonstrates how solutions developed for the track can be applied to enhance safer performance on the road (Fraser Motorcycles, 2011).
References:
"Ducati." Marketing 2 Nov. 2011: 16. Academic OneFile. Web. 4 Sept. 2015.
Fraser Motorcycles, 2011, About Superbike: Ducati Superbike, viewed 2 September 2015, <http://www.frasermotorcycles.com.au/ducati/superbike>.
Hoffman, E. (1988). The right to be human: A biography of Abraham Maslow. Jeremy P. Tarcher, Inc.
Kenrick, D. T., Neuberg, S. L., Griskevicius, V., Becker, D. V., & Schaller, M. (2010). Goal-Driven Cognition and Functional Behavior The Fundamental-Motives Framework. Current Directions in Psychological Science, 19(1), 63-67.
McLeod, S. A. (2014). Maslow's Hierarchy of Needs. Retrieved from www.simplypsychology.org/maslow.html
Tagliabue, J 2001 "How Ducati roared onto the Internet. (marketing motorcycles)." New York Times 18 Apr. 2001: H14. Academic OneFile. Web. 7 Sept. 2015.
The Consumer Factor, 2011, The 5 stages of Consumer Buying Decision Process, viewed 2 September 2015, <http://theconsumerfactor.com/en/5-stages-consumer-buying-decision-process/>.
The Market Media Life, 2015, Marketing 101: The Buyer Decision Process, viewed 2 September 2015, <http://marketmedialife.blogspot.com.au/2013/03/marketing-101-buyer-decision-process.html/>.
Thomas S. Robertson and James H. Myers, 1969, 'Personality Correlates of Opinion Leadership and Innovative Buying Behavior', American Marketing Association, vol. 6. no. 2, pp. 164-168.
MacDonald, S 2015, Rev Zilla: Why the Ducati scrambler is the bike for you, viewed 2 September 2015, <http://www.revzilla.com/common-tread/the-ducati-scrambler-is-the-best-bike>.
Microsoft Lumia - Situational Recap + Marketing Mix
4.1 Situational Recap
The Microsoft Lumia has a broad price range. The Lumia 550 and 650 are the budget range, and the Lumia 950 is the top-tier model. The Lumia 950 is loaded with Windows 10 operating system, 20MP camera and a device-pairing function called Continuum. Continuum can turn the Lumia into a desktop, and when paired with the increasing trend of cloud storage subscriptions, is beneficial to the portable lifestyle of the modern consumer. The Lumia 950 also comes with a unique system called Windows Hello, which scans your iris as a password substitute. An aspect like this is part of Microsoft’s unique selling proposition regarding the product. Statistics vary, but it is said between 79-89% of Australians own a smartphone, and 8% of that figure are using Windows phones. This can be considered an opportunity for Microsoft since it is projected that with each year more Australian’s will buy a smartphone. Microsoft’s two main competitors are Apple and Samsung, who collectively control 73% of the market share. Other lesser known competitors include Chinese brands Huawei and Xiaomi.
4.2 Marketing Mix
Product
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Promotion
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Price
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Place
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4.3 SWOT
Strengths
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Opportunities
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Weaknesses
phone users in comparison to Google
Android and Apple’s iOS.
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Threats
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Implications of integrating and/or fragmenting the Asian markets
There are numerous outcomes that can come from Old Spice engaging in either the integration or fragmentation of the Asian markets by the CPG manufacturer.
The integrated approach consists of companies such as Old Spice collaborating with a range of individuals such as vendors and business partners to find potential markets and cater the product to that region. CIO of British Airways Paul Corby describes the process as; “maintaining consistency of service, clarity of what the brand means, whilst being sensitive to a country’s needs”. Keeping this in mind when Old Spice enters the Asian market to distribute their various men’s health care products they need to ensure that they maintain their consistency across the board, and that they are considerate of the environment they are entering and how to cater for the demands in this region. Whilst Old Spices product of men’s health ware products are a universal necessity, the entry into the Asian market can be a complex equation. Whilst entry into such markets as Japan and China would mean access to a large population with a dispensable income, other countries such as Thailand or Indonesia have a vast poverty rate and low level incomes. Market Integration undertaken by Old Spice in this situation would be difficult but not unachievable, Old Spice would need to be sensitive to the cultural and religious differences between the two countries when undertaking promotional campaigns. For example such countries as China have restrictions on social media such as YouTube, the website plays a large role in the company's promotional campaigns as described earlier in the report, and would be a damaging blow on the success of Old Spice’s entry into this market. The implications of this would be that Old Spice would need to re-examine their marketing strategy in this country, but the nature of the integration system allows for companies to be faster and nimbler to changing opportunities. Whilst Old Spice’s prevailing social media campaign may be hindered, they can target other opportunities such China’s huge television audiences, with over 1 billion individuals (Wikipedia, 2016) tuning in to an array of programs.
Contrasting to this method the fragmented approach consists of organisations recognizing the diverse nature of the global market, and realising that whilst cultures, values and needs are different, they need to cater for their specific markets needs in order to be successful in a particular region. When engaging in this form of marketing Old Spice need to divide the market into four categories, psychographic, demographic, geographic, and behavioural segments (See Appendix 1.2). This allows for Old Spice to recognize and divide the market according to structure of the population, different countries acclamations, knowledge/usage/response to the product, and based on the various personalities of consumers. For example if Old Spice was to engage in this method they would need to gain an enormous and in-depth analysis of the chosen country, which would result in huge expenses due to the need to research the countries different segments appropriately.
Based on the implications discussed, Old Spice would be better suited to market integration as it allows for the company to seamlessly integrate and align their core values with that of their consumers and target market. This marketing technique is of the best interest to Old Spice as it will allow for the company to be more proactive rather than reactive to changing environments, to better maintain their products presence and dominance in the region.
Social media research facilitate the firm’s business growth in the global marketspace
Research of social media in the global marketspace can be beneficial for a business and its growth in the global market space. Statistics provided by Chaffey (2016) show that at January 2016, there were 2.307 billion active social media users across the globe, which is a 10% (219 million people) growth from January 2015. These figures show that social media is a profound channel of communication for businesses and a promising facilitator of growth. With social media use rapidly growing globally, businesses can capitalise on this to gain mass exposure for their brand. Social media research can help facilitate business growth by providing vital information to a firm’s strategy when choosing to actively advertise or participate in social media interactions. Old Spice can use social media research as a tool to obtain information about the male personal care market, such as personal behaviour of consumers, social behaviour, and the social aspects theory. More importantly, Netnographic studies and sentiment analysis.
Netnography is primarily a qualitative research method in studying behaviours of online communities and provides consumer insights in regard to a product or service. “Netnography is essentially ethnographic research applied to the web” (Rocca, 2014). This research involves a business to follow conversations online between consumers about its products on its social media sites (Facebook, twitter etc.) and develop a data set that can be analysed for commonalities (What is netnography?, 2011) and using that information, the firm can determine common trends with certain cultures or with different age groups and adapt its strategy to further improve or maintain certain patterns of consumer reactions. By using netnographic as a research method, Old Spice can gain a better understanding of its consumers and how they receive the products being offered and their experiences with the products. For example, Old Spice may conduct netnographical research on its Facebook page, monitoring discussions on threads about its deodorants and may discover that some consumers react negatively to the odours that old spice offer and may discuss probabilities of new scents that they may desire or are using from other companies. Old Spice can take this information and discover a business opportunity to introduce new scents for its deodorants in addition to those currently on offer.
“Sentiment analysis and opinion mining is the field of study that analyzes people's opinions, sentiments, evaluations, attitudes, and emotions from written language.” (Liu, 2012). It is paramount that firms understand how consumers are talking about their products and understand how consumers are perceiving the brand and expressing that to other users or potential users. With the internet being the fastest and easiest way to express positive or negative opinions about products, it has become one of the main channels that consumers use to gain information about a product or brand pre purchase and use this information to come to a purchasing decision (Browning, 2013). Old Spice can use a sentiment analysis to track negative reviews, new product perception (suggestions for new products), brand perception (how consumers feel about Old Spice as a brand), and reputation management.
Social media research can facilitate business growth in the global marketspace by providing firms with the necessary information to further develop products and advertisements based on consumer opinions and input rather than guessing what consumers want.
References:
References:
What is netnography?, 2011, video recording, SAGE Publications, Inc., Thousand Oaks, CA. Viewed 10 May 2016, doi:http://dx.doi.org.ezproxy.lib.swin.edu.au/null.
Liu, B 2012, Synthesis Lectures on Human Language Technologies, May 2012, Vol. 5, No. 1 , Pages 1-167
Browning, V. So, K. & Sparks, B. A. (2013). The Influence of Online Reviews on Consumers’ Attributions of Service Quality and Control for Service Standards in Hotels, Journal of Travel & Tourism Marketing, 30 (1-2) 23-40.
Two way dialogue between the brand and consumers
“Old Spice, a decidedly old-school Procter & Gamble brand, unleashed a social media blitz so profoundly brilliant that it not only changed the rules of social network marketing, it may have written them for the first time” (Reiss, 2010). The old spice commercial brand revolutionised the social media scene transforming the brand right before the customer’s eyes. Using comedic marketing techniques together with a ‘shirtless, magnetic presence of actor Isaiah Mustafa’, we get a sense of the overwhelming presence of sex appeal, from the ‘former NFL wide receiver who goes big--very big--here’. Mustafa’s opening tagline which captivates listeners from the very get go. “Hello, ladies,” he thunders. “Look at your man. Now back at me. Now back at your man. Now back to me” (Lippert, 2010).
Since social media has come onto the scene, big named brands have been trying to get in the limelight. They do this because Social media is an important aspect of any brand. According to HubSpot, “social media produces almost double the marketing leads of traditional outbound methods” (Edgecomb, 2013). But how does this connect to two-way conversation? Well Old Spice created the lead by broadcasting a very interesting and captivatingly funny television commercial, which then people took to social media to talk about. Old Spice used this opportunity to further communicate their brand. They did this by taking to Youtube with personalised video’s for consumers and also posting funny comments on Twitter (See Appendix 1.1).
In the first three months of 2010 Old Spice captured 75% of all conversations about the product. Half of this Buzz was generated by women. So from this the Response Campaign was born. In two and a half days a team of developers and producers and creative geniuses created 186 video responses to fans and celebrities about questions on Twitter, Facebook, Reddit and more. “On social media, the “Responses” campaign was deployed mainly through Twitter and YouTube and delivered customized tailored content in a flash” (Top Ad Campaign of the 21st Century, 2015). These videos were then posted on Youtube sparking a social-media sensation that spread through thousands of people. On one day alone the campaign received 5.9 million Youtube views, after a week that rose to over 40 million views.
“Unlike a one-way conversation, where companies dominate the conversation and don't really engage, a two way conversation allows companies to interact and engage with consumers in a direct and responsive way” (Edgecomb, 2013). It’s not all about forcing your message onto the public, Old Spice new this and took comfort in knowing that their product was seen as ‘Cool’, and ‘Funny’. The once traditional aftershave brand label with ties to grandparents was reinvigorated into their new body wash product. Old Spice was marketed to the ‘average Joe’, they wanted to have a conversation with their customers says Paula Borowska. ‘Old Spice wanted to create a relationship, which the value of is irreplaceable’. (Borowska, 2013). In the commercials, the Old Spice Man would ask the audience for requests, revealing that they cared for their customers. This contributed to the overall success and the viral status of the commercial. Within the first six months of ‘the man your man could smell like’, sales increased 27%. The commercial itself made over 1.4 billion impressions (Borowska, 2013). Alternatively online Old Spice's Facebook page has gotten more than 7,000 comments (and 13,000 or so "likes"). Look again, at YouTube, where it's been viewed more than 3 million times” (Lippert, 2010).
For two-way communication to work over the internet the company needs to first direct 80% of communication towards adding value, and brand building. ‘Examples of these include, sharing news, ideas, educating and creating delightful content. The other 20% of communication should be focused on endorsing products and upcoming events’ (Edgecomb, 2013). This in-turn makes the company more personal and actually embodies the company's culture onto the public.
References:
Lippert, B 2010, 'Man, This Man Can Sell', Brandweek, vol. 51, no. 9, p. 20
Edgecomb, C 2013, ‘Social Media Marketing: The importance of two way conversation’, Impact, https://www.impactbnd.com/blog/social-media-marketing-the-importance-of-a-two-way-conversation
References:
Lippert, B 2010, 'Man, This Man Can Sell', Brandweek, vol. 51, no. 9, p. 20
Edgecomb, C 2013, ‘Social Media Marketing: The importance of two way conversation’, Impact, https://www.impactbnd.com/blog/social-media-marketing-the-importance-of-a-two-way-conversation
'Top Ad Campaign of the 21st Century', 2015, Advertising Age, vol. 86, no. 1, p. 0018.
Borowska, P 2013, ‘What can Old Spice teach us about effective marketing?’, Viral Marketing, Creative Guerrilla Marketing, http://www.creativeguerrillamarketing.com/viral-marketing/can-old-spice-teach-us-effective-marketing/
Monday, April 18, 2016
Handling Customer Complaints and Managing Service Recovery
Customer complaints and service recovery are the most important things for a business, they both have potential to affect customers level of satisfaction. They also provide a chance for the customer to offer their different opinion, thereby improving the business service. As shown in Figure 12.1, when there is service failure customers elicit different responses. Due to this variation of behaviour; the business would never know what the customer is thinking without understanding customer complaint behaviours. Moreover, once the business knows what makes a customer unhappy, they need to quickly respond to the customer.
One in four customers has a problem with products purchased. If the item purchased is relatively low in price, only one in five will register a complaint (Eccles & Durand 1998). Most of the customers will not complain even though they have a problem with the product. For example, when people buy flowers from Canary Jane’s Flowers, once they get home and find the flowers are not fresh, they probably won’t go back to the shop and complain because the cost of time complaining does not seem worth it.Instead they may decide not come to the shop again. Therefore, Canary Jane’s Flowers needs to make a different plan for customers, making a complaint strategy to maximise customer satisfaction, such as recording the customer mobile phone number and make a call to them after the customer purchase. The business should always be proactive to gather information from the customer (Blazevic & Lievens 2007).
Once the business receives the complaint from customer, there are many steps to recover services. The most effective way is returning the money to the customer if there is a big problem with the product, or apologise to the customer and attempt to find out why they’re dissatisfied, thereby the business can provide adequate explanation to persuade the customer to come back again. In addition, the business should build blueprints to help the manager to go through every fail point of the service, and avoid it happening again, this is another method of service recovery.
References:
Eccles, G & Durand, P 1998, 'Complaining customers, service recovery and continuous improvement',Managing Service Quality, vol. 8, no. 1, pp. 68-71.
Blazevic, V & Lievens, A 2007, 'Managing innovation through customer coproduced knowledge in electronic services: An exploratory study', Journal of the Academy of Marketing Science, vol. 36, no. 1, pp. 138-151.
The Role of Customers Within the Organisation
The “key characteristic of a service is that it takes place at the interface with the customer”, therefore without customers the service does not exist (Maull, Geraldi & Johnston 2012). The role of the customer within a florist is to identify their needs and wants and communicate as effectively as possible to the service provider.
There is significant variance in the amount of participation that customers apply, and the optimal level may not always be reached (Gallan et al. 2012). As illustrated in Figure 11.1, a florist’s customer’s optimal level of participation is moderate. A florist like Canary Jane’s Flowers requires customer inputs for an adequate outcome but the florist still provides the range of flowers. It is not considered high participation because the client participation does not guide what flowers you buy, and customer does not co-create the outcome, like a personal trainer would.
The customer needs to be able to demonstrate the desire to search for information or a particular product, or able to create a flower arrangement order. In Canary Jane’s case the customer would either want to search for information about what they want, whether it be flowers or a gift, or have the ability to understand what type of flowers they want and order an arrangement. The employee provides product knowledge, organisation offerings and an end result; regardless if there is a sale or not.
It’s important to highlight that Canary Jane’s is a family friendly business; they sell some children toys and therefore attract a lot of adult customers with infants. Children can be stubborn and not obedient when they are told not to touch items, you can only control children to a certain extent. Due to this these customers are not able to perform their role in the service. However, Canary Jane’s have implemented a strategic method of dealing with such customers, they have put all the unbreakable and not precious items on the low height so this way the children can still touch items but there is no issue of them breaking these items.
The organisation, although a service, creates tangible aspects to support the intangible service. For instance, at Canary Jane’s Flowers they provide a business card of contact details on the gift bag with the purchase as well as a physical copy of the debit card receipt, (refer to appendix photos 11.21, 11.22, 11.23) therefore the business played their role in this encounter but if the customer does not follow through with their implicit role of storing their receipt for a reasonable period, then a resolution in order to resolve post purchase issues from the customer’s side has not been fulfilled. Since Canary Jane’s Flowers has attached their business details, it’s the customer’s implicit responsibility to contact the store if an issue arises; this is in both parties best interest. This leads into complaint behaviour and how to deal with complaints.
References:
Maull, R, Geraldi, J & Johnston, R 2012, 'Service Supply Chains: A Customer Perspective', Journal of Supply Chain Management, vol. 48, no. 4, pp. 72-86.
Maull, R, Geraldi, J & Johnston, R 2012, 'Service Supply Chains: A Customer Perspective', Journal of Supply Chain Management, vol. 48, no. 4, pp. 72-86.
Gallan, A, Jarvis, C, Brown, S & Bitner, M 2012, 'Customer positivity and participation in services: an empirical test in a health care context', Journal of the Academy of Marketing Science, vol. 41, no. 3, pp. 338-356.
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