Marketing Intelligence Assignment - Buyer Behaviour Theories
Marketing intelligence buyer behaviour theories assignment provides valuable insight on different aspects related to the concept of marketing intelligence. The various stages of purchase decision process along with buyer behaviour theories in terms of individuals and markets have been analysed. The various factors that affect the consumer buying behaviour have been discussed along with the inter-relationship between corporate image, brand loyalty and repeat purchase. The second segment evaluates the various market research techniques. Secondary research is carried out to justify the fact that the levels of customer satisfaction among the customers of Sainsbury has been diminishing off late. The various techniques of assessing customer response have been highlighted along with the designing and review of a customer satisfaction survey. In the final segment, an assessment in market size trends is carried out. A competitor analysis has been carried out on British Airways and also the relevant threats and opportunities of the company have been documented backed by extensive research.
1.1 Describe the main stages of the purchase decision making process
The different stages of purchase decision making progress include:
- Need/Problem Recognition: This is the most important stage of the process as if there is no need generated in the consumer’s mind in order to acquire something, there can be no purchase. This often happens when the customer is in a particular situation and he wants to get to the desired position by acquiring the desired product or service. Internal Stimuli can be generated as a result of physiological needs like hunger and thirst. External stimuli are generated when exposed to an advertisement or any directed promotion material. (Heiler, 2015)
- Information Search: Once the problem is determined, the customer will start on his quest of information search in order to find the most pertinent solution to the problem. Internal information refers to the already present information in the customer’s mind as a result of past experiences with a product or a service. External information can be provided by external means like advertisements, friends and family, etc.
- Evaluation of alternatives: The consumer will verify all the information that he is subjected to and will want to figure out his best options. All alternative means will be evaluated which might help in satisfying his problem or need generated and the best alternative to the problem according to the consumer will be selected for consumption. (Consumerfactor, 2016)
- Purchase Decision: Based on the evaluation of all the alternatives that may solve his problem or satisfy his need, the consumer ends up purchasing a product or service which in his mind is the most appropriate and will give him the best return as a result of the purchase made. It has to be noted that if need is not generated in Stage 1 then this stage will not be in existence.
- Post Purchase Behaviour: After purchase, the consumer evaluates the adequacy of the product or service consumed by him and compares if the consumed entity has given him expected levels of satisfaction or not. He will either be satisfied or dissatisfied. Evaluation of the post purchase behaviour is important as it gives an idea as to what his future tendencies might be.
1.2 explain theories of buyer behaviour in terms of individuals and markets
The theories of buyer behaviour in terms of markets and individuals are as follows.
- Generic Theory: The generic theory states that the consumer will follow the traditional process where the generation of need will lead to information search and alternative evaluation and then finally the purchasing decision will be made with due emphasis on the post purchase behaviour of the individual. Based on this competitors in the market will try their best to promote their services and products in such a way that it appeals to them and makes the list of the consumer’s alternatives.
- Cultural Theory: This theory states that the buying behaviour of a consumer is generated from his beliefs that are a part of his culture within which he has grown up in. Therefore while marketing and promoting goods and services, competitors should not compile the message in such a way that it hurts the cultural sentiments of the consumers. (Penn, 2016)
- Environmental Theory: This theory states that a consumer exhibits distinct buying behaviour depending on the situation he is in. For ex- peanuts may be loved by a consumer but he will not consider it an option at dinner. Thus marketers should try to accommodate this factor in their promotional message.
- Internal Theory: This states that different consumers exhibit different behaviour of purchasing based on his internal theory that generates out of distinct physiological needs among people. For ex- Some people may want to examine each and every product in different shops before he makes his purchase as he wants to ensure that he ends up buying the best deal. Similarly, there might be a few customers who would want to get over with their purchasing as soon as they find a product or service that is good enough for consumption. Thus different people exhibit different behaviours based on their generation of internal need.
1.3 explain the factors that affect buyer behaviour
The factors influencing buying behaviour include,
- Cultural Factors: These factors have a deep influence on the buying behaviour of the consumer and hence the marketer needs to understand the role of the buyer’s culture, subculture and social class. Culture can be defined as the set of values, norms and perceptions that is transferred from one generation to the other as a result of hailing from a particular background. This is why consumers from different countries behave differently. Culture does tend to change as existing patterns give way to new ones. Subculture refers to the existence of groups within a culture exhibiting distinct attributes of behaviour that segregates them from other groups within the culture. Subcultures can be distinguished on factors like religion, racial groups and geographical region. Social Classes are homogenous in nature and are hierarchically structured and members share similar interests and behaviour. All these factors play a role in the buying behaviour.
- Social Factors: The social factors influencing buying behaviour can be analysed by discussing the roles of reference groups and family members. Reference group of an individual consists of all those members who have a direct impact or influence on the consumer’s mind and life. These include neighbours, friends, family, colleagues, etc. The individual tries to comply and conform to the norms of all these people and this considerably affects his purchasing behaviour. Family members constitute the most vital part of the reference groups. A family member can be referred to a relationship by blood, marriage or adoption. A family thus has huge influences on the buying behaviour of a consumer. (Kapoor, 2014)
- Personal Factors: Under personal factors, two key elements are motivation and perception. Maslow determines the motivational needs of an individual as from basic needs to self actualisation and states that a consumer will buy a product or a service when the need arises backed with enough motivation. Perception can be defined as the process by which a consumer selects, organises and interprets information. Selective attention refers to the amount of voluntary subjection that a consumer might entitle himself to. Selective distortion refers to the customised twisting of information to suit the present perceptive mind and selective retention refers to the information retained successfully by the consumer that they want to retain and ignoring the ones that does not seem pertinent to them.
1.4 evaluate the relationship between brand loyalty, corporate image and repeat purchasing
Brand Loyalty is achieved only when a consumer displays favourable post purchase behaviour after the consumption of a product or a service. One can determine absolute brand loyalty only when the consumer decides to resort to the services or products of the same company again. Until and unless the consumer decides to avail to the same company again, brand loyalty cannot be registered. However it has to be kept in mind that just merely availing to the services two or three times does not determine brand loyalty. A consumer has to show an evident inclination for a consistent period of time and only then can one establish brand loyalty. Thus it can be said that consistent loyalty to a brand can be a result of a consumer availing to the products and services of the company for a long time and his actions can now be determined as repeat purchasing. This is how repeat purchasing and brand loyalty can be related.
The corporate image of a brand goes a long way in influencing consumer buying behaviour. The corporate image tends to compliment the brand in several ways. The consumers tend to relate the overall image of the brand to the quality of the products and services. Companies these days engage in large scale corporate social responsibility activities where they undertake initiatives directed towards the well being of the community and environment. These activities tend to create a lasting impression on the minds of the consumers and they feel obliged to resort to the products and services of these companies and brands at large. The corporate social initiatives thus help in building the image of the firm. Once a sound image is established, consumers look to avail the services and products. This lays the foundation for the chance of repeat purchases based on the high corporate image of the company. Once repeated purchase has been established, one can associate brand loyalty with the company. This is the inter-relationship between corporate image, brand loyalty and repeat purchases.
Thus we come to see that corporate image, brand awareness and repeat purchase are indeed strong antecedents for the creation of customer loyalty. (Kim & Lee, 2010)
2.1 Evaluate different types of market research techniques
The different types of market research techniques include:
- Surveys: A sample group that represents the target market can be analysed by the help of concise and straightforward questionnaires. The results can be expected to be more reliable if the size of the sample is bigger. One on one interviews conducted in high traffic locations can be referred to as in-person surveys. One can provide locusassignments.of products and locusassignments.and aim to receive immediate feedback. This method generates high response rates but is very expensive. Telephone surveys also generate response rates but over the years convincing the customer over the telephone has become increasingly difficult. Mail surveys are inexpensive in nature but hardly generate very little response rates. Online surveys provide inconsistent and unpredictable response rates. (Allbusiness Editors, 2016)
- Focus Groups: This method consists of a moderator who with help of a series of scripted questions sparks of a discussion among a group of people. Most focus group sessions take place in neutral locations with the prevalence of video-recording equipment and room for observation which contains one-way mirrors. Most focus groups last from an hour to two.
- Personal Interviews: Very much like focus groups, questions that are unstructured in nature and open ended are included in personal interviews. More of subjective data is accumulated from personal interviews which are not completely reliable statistically. This is because not a huge segment of population is represented by it. Yet it is a very popular means as it provides effective insight on the aspect of customer attitudes.
- Observation: Many times individuals exhibit contradictory behaviour in their actual life compared to when they are a part of interviews or focus groups. Observation of their actions in real life like at home or at work can give clarity on how they actually behave while buying or using a product or a service. This helps in the accumulation of more credible information and knowledge about the consumers.
- Field Trials: A new product or a service can be placed in certain stores in order to test customer response. This can help one make changes like product modifications, setting a price o improving packaging accordingly. Field trials often give a fair indication of what it would be like in the real life selling world.
2.2 Use sources of secondary data to achieve marketing research objectives
The level of satisfaction among Sainsbury customers can be said to have been diminishing over the last few years. Prevalence of companies like Lidl & Aldi, Morrison, etc has certainly ensured that the satisfaction levels of Sainsbury customers become saturated. Various instances can be taken note of that can justify the fact that the customer satisfaction levels of the customers is not what it used to be.
The first instance can be related to the requirements in 2013/14 when they found the need to take considerable measures for improving the in-store customer experience. They took measures of investing into staff training and also developed an automated tool that would allow one to track availability. They also made investments system infrastructure for the creation of a single view of its customers. Besides, the CEO Mike Coupe said that their main strategy included emphasising on product quality and increase multi channel shopping in order to address the shift in customer shopping patterns. All of this justifies the fact that there definitely has been a fall in customer satisfactions levels in Sainsbury. (Business Reporter, 2014) Another instance that justifies drop in customer satisfaction can be taken of the case in 2015 when the supermarket giant recorded its first annual loss in ten years. There was also a drop in the shares of Sainsbury. The CEO again said that the UK supermarket has displayed inconsistent attributes owing to the rise of cheap players. In all fairness, Sainsbury should not be concerned with what others are doing. The evidence of annual loss is another instance that clearly denotes that there has been a drop in the levels of customer satisfaction. (BBC, 2015)
The final instance can be of the case in 2016 when Sainsbury showed tremendous urge to buy Argos. The main objective behind buying Argos was communicated by Sainsbury which stated that acquiring Argos would give them a chance to boost their sales growth and also give them a chance to sell to each other’s customers. This was a big give away of the fact that the customer satisfaction levels of the customers of Sainsbury had reached a saturation point. (Hope, 2016)
2.3 Assess the validity and reliability of market research findings (NB. This should be based on your secondary sources of data in task 2.2).
Three instances to justify the fact that there has been a drop in customer satisfaction levels of Sainsbury customers have been provided in 2.2. The validity and the reliability of the findings can be administered by analysing the facts and figures pertaining to the drop in sales, market share, annual loss, etc. In the 2014 case, the plans to improve customer experience were basically due to the underlying drop in group sales by 0.3% to 13,916 million pounds in 28 weeks till September 27th. The figure stood at 13,953 million pounds in the year 2013/14. Like-for-Like sales also dropped by 2.1%. Due to such figures, Sainsbury was compelled to undertake measures that would improve the levels of in-store customer experience. (Business Reporter, 2014)
In 2015, Sainsbury registered its first ever annual loss in the last ten years. The supermarket giant recorded a net loss of 72 million pounds in the existing year till the date of 14th March. The one off costs excluded, the underlying pre-tax profits also fell by 14.7% to 681 million pounds in comparison to 798 million pounds the year before. The group sales too fell by 0.9% to 26.1 billion pounds. Sainsbury also experienced a negligible drop of 0.1% in comparison to last year in the supermarket share standing at 16.5%. (BBC, 2015) In the 2016 case, The drop in sales of Sainsbury was complemented by the poor performance of Argos. Sainsbury wanted to acquire Argos in order to have a larger customer base and also because the existing customers of Sainsbury were saturated with regards to the customer satisfaction levels. Sainsbury offered a massive 1.3 billion pounds in order to acquire or win control over the home retail group. Out of the 734 stores up for renewal in the next few years, Sainsbury already had set a target to acquire and convert around 150 to 200 stores into Sainsbury stores. (Hope, 2016)
All of the information above displays facts and figures that support the argument discussed in 2.2. Thus the validity and reliability of the market research findings have been achieved.
2.4 Prepare a marketing research plan to obtain information in a given situation
Preparation of a marketing research plan in order to obtain information includes the following steps.
- Defining the problem: This is one of the most important steps in the planning process as it lays the foundation for the rest of the research. Before conducting an effective market research, it is important that the problem is clearly defined. It is significant in this stage to establish the objectives of research. Questions should be developed that will help in defining the problem clearly. (Marketing91, 2016)
- Development of Research Plan: Once the problem has been clearly defined, one should now concentrate on developing and designing the research plan in order to save costs, the following cost effective techniques can be incorporated. The first technique is by conducting interviews. It is a useful means of understanding views and opinions. A survey can be conducted either online or offline. Online research has slowly gathered pace with the growing advent of the internet as a technology.
- Collection of relevant data and information: After the start of collection of data, it has to be seen and ensured that the data and information accumulated is relevant, valid and most importantly unbiased. A mixture of techniques mentioned above should be applied in order to get viewpoints and information from distinct angles and perspectives. It has to be seen that the data collected should be analytical, statistical, scientific as well as emotional in order to depict the most accurate information.
- Analysing Data & Findings: After the collection of information, it is important to analyse and interpret the data accurately. The key is to look for trends rather than concentrate on specific pieces of information. While doing the analysis of the data, it is important that the previous assumptions before the collection of the data are not considered for the purpose of finding patterns. It all right to get the hypothesis wrong as that is why the testing is done so that one does not go with the assumptions.
- Take Action: this is the stage where the findings are taken into consideration and action is taken. Marketing campaigns should be developed and the findings should be put to the test. It is important to account for the changes that come about as trends can change with time. It is not a compulsion that an identified trend or pattern has to always remain the same.
4.1 Evaluate techniques of assessing customer response
The various techniques of assessing customer response are as follows
- Home Customer Survey: Various businesses across the globe avail to this kind of survey in order to understand the expectations and needs of their customers. This type of survey includes email survey and takes home surveys that are often attached to the receipts of the customers. The objective is to request the customer to provide feedback on the service or product that they availed, the conduct and expertise of the staff, and also their personal opinions about the product or service. These responses are based on the latest interaction that the customers had with a company or its products and services. (Hammond, 2016)
- Customer Service Questionnaire: The brief surveys that customers are entitled to while approaching the customer service department to voice a problem is known as customer service questionnaire. Various factors are covered in this survey like customer complaints, the shopping experience of the customer, their perspective on product problems, etc. These questionnaires can be short physical surveys, verbal in nature or even a general assessment about the problem of the customers. Customer perception can be understood through this procedure.
- Customer Suggestions: The perspective of the customer should be taken into account. The customer should be accounted for in the way he thinks that mode of operations related to the business can be improved. Catering to customer advice and suggestion will not only help them devise methods to improve the business but will also help them attend to the personal preferences of their customer base that will lead to brand loyalty. This will not only benefit the business but the customers will also feel important and valued.
- Online Feedback: With the advent of technology and digital media, a lot of ways have come up in which customer response can be assessed. Businesses today are looking to add the facet of customer feedback on their official website. Apart from this, consumers post their queries, complaints and opinions on various consumer forums and social forums like facebook, etc. Carefully assessing the responses online helps in businesses reacting to changes better and quicker as opposed to a business not considerate towards online feedback. (Baker, 2012
4.2 Design and complete a customer satisfaction survey
Dear Customer: We thank you for being on-board with Sainsbury. It has been an absolute pleasure serving you as we look forward to develop our services in order to meet your preferences. Kindly take out some time and let us know about the credibility of our service and help us serve you better in the future.
4.3 Review the success of a completed survey (NB, Your evaluation should be linked to your customer satisfaction survey in task 4.2)
The customer satisfaction survey conducted in 4.2 was successful in the sense that it provided a lot of information about what is fine at Sainsbury and what needs to be fine. The success of a survey is generally determined by the number of response rates that the survey has achieved. In this case, response rates of around 200 people have been analysed to determine various factors. Around 80% of the people stated that they strongly agree with the training given to the representatives. This proves that the training and development programmes for the employees have really worked and holds Sainsbury in good stead. Around 70% of the people strongly agreed to the fact that they will come back to Sainsbury again. Around 50% of people thought that the products were not well assembled. This shows that there is tremendous room for improvement in the way the products are assembled for display.
When it came to the supervisors, customers were not particularly happy with their attitude. Close to 70% of the customers thought that the supervisors did not play much role as the bulk of the work was being done by the representatives. They did not think that the supervisors were proficient which could only mean that either the supervisors did not attend properly to customer queries or they are taking their job for granted. This also means that most of the development programmes are required to be targeted towards the top management of the company. The other area of great concern was the billing desk. According to 90% of the customers, there the billing desk was always cramped for room. This was a huge concern as one of the main reasons behind lack of customers in the store on weekends can be assumed to be this. People have to face great inconvenience if they have to stand in the cue for long hours. This meant that immediate attention had to be given to the billing desks with plans to either extend the space or even incorporate two extra desks. Overall, the customers were quite satisfied at the service of the representatives and subordinates as 75% of the people felt that they were well attended to.
Thus the survey helped in pointing out all the positives that should be looked to enhance in the future and it also demarcated areas which needed considerable improvement like that of the billing desk and supervisors.
3.1 Carry out an assessment of market size trends within a selected market of your choice.
The selected market taken in consideration here is the ‘Global Aviation Industry’ as on 2014.
The passenger traffic globally saw an upswing and rise by 5.8% in the initial eight months of the year 2014. Europe saw a rise by close to 30%. Asia Pacific and North America too saw a rise by 29.2% and 25% respectively. These are the regions that constitute of most of the global market share in terms of passenger traffic. Taking the domestic market into perspective, China and the United States of America account for the highest shares of traffic exhibiting figures of 42.7% and 22.3% respectively. Apart from these regions, there has been growth in traffic in Latin America, Africa and the Middle East as well. (Market Realist, 2014)
The above chart depicts the market share in terms of traffic pertaining to the top 15 airlines in the world. It can be seen that five of the airlines are from the US. They are Delta Air Lines, UC Holdings, American Airlines, US Airways & South-West Airlines. With close to 288 billion revenue passenger kilometres, United Continental was ranked first in the list. They were closely followed by Delta with around 278 billion. However, in 2013 the biggest increase in terms of traffic was displayed by Emirates. Apart from all of these airlines, there are 3 Chinese airlines in the top 15 that have exhibited growth of over 9%. Those airlines are Air China, China Southern and China Eastern. In context to the European market, the highest growth rate of close to 7% was exhibited by Ryanair. British Airways, AF-KLM and Lufthansa were also in the contention just behind Ryanair. In the context of Latin America, the region experienced a growth that was diminishing in nature with a growth percentage recorded of around 2.5% which was considerably lower than the growth rate in other regions.
This was the assessment of the market size of the Global Aviation Industry.
3.2 Describe a plan and carry out a competitor analysis for one of the following organisations.
The organisation taken into consideration here is ‘The British Airways’.
The competitor analysis of British Airways can be carried out by conducting an effective Porter’s 5 forces analysis. (Mindtools, 2016)
- Supplier Power: British Airways has 2 primary suppliers for their aircraft. They are Boeing and Air Bus. They are very renowned all across the globe and have a stiff competition amidst them. They are the lone suppliers of aircrafts to British Airways and hence enjoy a high bargaining power. This is because of the quality that they provide and also because of lack of other options. The fuel suppliers are also lacking competitors and hence they enjoy a high bargaining power as well. However, collaboration with Solena fuels has given British Airways a chance to produce jet fuel resulting out of waste.
- Buyer Power: The buyer power is both high and low. It is high for the short haul services and low for the long haul services. This is because Europe is renowned for a high number of players when it comes to cost effective airlines especially in the short haul market. Hence the number of options available to the people is more. However the bargaining power for long haul customers is not as much as the pricing of all leading airlines like Emirates, British Airways, etc is almost similar. Hence not too much bargaining power can be associated with them. (Flouris & Oswald, 2006)
- Competitive Rivalry: British Airways has operations both in the long haul and the short haul market. For long haul operations it receives fair amount of competition from Emirates and the other major Middle Eastern carriers. However, in the avenue of full service long haul flights, the main competitors are Lufthansa and Air France. If intense rivalry and cut throat competition has to be analysed, emphasis has to be laid on the short haul market. The advent of EasyJet poses considerable competition for British Airways. But the bitterest rivalry exists between British Airways and Virgin Atlantic in the short haul market. (Gregory, 2012)
- Threat of substitutes: There are no substitutes as such when the long haul operations are taken in consideration. But there are a few substitutes in the short haul travels that people can resort to. Despite the present development of regional airports all across UK, people might want to avail buses, trains, tubes or even drive down personally to neighbouring and domestic cities.
- Threat of New Entry: The entire proposition of a new entrant seems improbable as the regulation standards have become very stiff due to the enforcers. Besides, the airline market is already very established and diverse especially in the short haul market. Any new entrant will have to invest unrealistic amounts if it wants to be in the reckoning. Hence, there is no considerable threat of new entrants.
Analysed above is the competitive rivalry of British Airways.
3.3 Using the selected organisation above (3.2), evaluate the opportunities and threats for a given product or service (3.3)
The opportunities and threats to the short haul and long haul services of British Airways include the following.
- The expanding market is one of the biggest opportunities for British Airways. The emergence of developing economies, emergence of increased foreign tourism and middle class expansion has ensured that there is an increase in business opportunities. Enough opportunity lies in developing new routes to conduct operations on.
- There is substantial intervention from the government that affect the airline companies’ operations and many competitors are compelled to leave the market as they can hardly cope with the unreasonably high competitor cost. (Marketing91, 2016)
- In flight products and services can be improved. In flight products & services include things like LED screens, earphones, updated magazines, high quality in flight food, expensive beverages, etc.
- The major threat is the increasing number of competition especially in the short haul market of operations. Europe is renowned for having exceeding numbers of players in the shot haul market especially the low cost carriers. Airlines like EasyJet and Ryanair has poses stiff challenge to British Airways. The biggest threat for quite some time now has been Virgin Atlantic.
- Another threat is the prevalence of strict government regulations. Web of tight regulations govern all mode of operations of British Airways which include route of operations, acquisitions made, infrastructure investments, corporate social responsibilities, etc.
- In the short haul market people slowly are getting accustomed to alternative transportation facilities as a result of improvement in infrastructure. People may cover short distances of intercity routes with the help of tubes, buses, high speed trains, etc.
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From this assignment we come to know that the main stages in purchase decision making process include recognition of need, information search, evaluation of alternatives, purchase and finally post purchase behaviour. The various theories of buyer behaviour are generic theory, internal theory, cultural theory, etc. The various market research techniques include surveys, focus groups, and questionnaires. The various techniques of assessing customer response include Home Customer Survey, Customer Service Questionnaires, and Customer Suggestions and Online feedback. A customer satisfaction survey has been prepared by taking into consideration the supermarket organisation of Sainsbury and the success of the completed survey has been analysed on an assumptive basis. Apart from this the market size trends assessment has been conducted on the Global Aviation Industry. The competitor analysis of British Airways depicts that Emirates, Lufthansa and Air France are the main competitors in the long haul market and Virgin Atlantic, Ryanair and EasyJet are the major competitors in the short haul market. The opportunities and threats of British Airways has also been effectively discussed.
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