CONSUMER BEHAVIOR ISMS ONGOING EXAM ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558
CONTACT: DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: firstname.lastname@example.org WEBSITE: www.casestudyandprojectreports.com
Sunder Singh had studied only up to high school. He was 32-years of age, lived alone in a rented room, and worked eight-hour shift at one petrol pump, then went to the other one for another eight-hour shift. He had a girl friend and was planning to marry.
One day when he returned from work, he got a note from his girl friend that she was getting married to someone else and he need not bother her. This was a terrible shock to Sunder Singh and he fell apart. He stopped going to work, spent sleepless nights, and was very depressed. After a month, he was running Iowan his savings and approached his earlier employers to get back his job, but they would not give him a second chance. He had to quit his rented room, and sold few things that he had. He would do some odd jobs at the railway station or the bus terminal.
One day, nearly two years ago, he was very hungry and did not have any money and saw a young man selling newspapers. He asked him what he was selling and he told him about Guzara (an independent, non-profit, independent newspaper sold by the homeless, and economically disadvantaged men and women of this metro city). Sunder Singh approached the office and started selling the newspaper. He did not make a lot of money, but was good at saving it. He started saving money for a warm jacket for next winter.
He was reasonably happy; he had money to buy food, and no longer homeless and shared a room with two others. One day, with his savings he bought a pair of second-hand Nike shoes from flea market.
Sunder Singh is not unique among low-income consumers, especially in large cities, in wanting and buying Nike shoes. Some experts believe that low-income consumers too want the same products and service that other consumers want.
The working poor are forced to spend a disproportionate percent of their income on food, housing, utilities, and healthcare. They solely rely on public transportation, spend very little on entertainment of any kind, and have no security of any kind. Their fight is mainly day-to-day survival.
1. What does the purchase of a product like Nike mean to Sunder Singh?
2. What does the story say about our society and the impact of marketing on consumer behavior?
One hot May morning, Shobha, general manager of Innotrap India Ltd., entered her office in Delhi. She paused for a moment to contemplate the quote, which she had framed and hung on a wall facing her table.
“If a man can make a better mousetrap than his neighbour, the world will make a beaten path to his door.” She vaguely recalled that probably it was Ralph Waldo Emerson who said this. Perhaps, she wondered, Emerson knew something that she didn’t. She had the better mousetrap – Mouse¬-Rid – but the world didn’t seem all that excited about it.
Shobha had just returned from a Trade Fair in Kolkata. Standing in the trade show display booth for long hours and answering the same questions hundreds of times had been tiring. Yet, this show had excited her. The Trade Fair officials held a contest to select the best new product introduced at the show. Of the more than 150 new products, her mousetrap had won first place. Two women’s magazines had written small articles about this innovative mousetrap, however, the expected demand for the trap had not materialised. Shobha hoped that this award might stimulate increased interest and sales.
A group of investors who had obtained rights to market this innovative mousetrap in India had formed Innotrap India in January 2001. In return for marketing rights, the group agreed to pay the inventor and patent holder, a retired engineer, a royalty fee for each trap sold. The group then appointed Shobha as the general manager to develop and manage Innotrap India Ltd.
The Mouse-Rid, a simple yet clever device, is manufactured by a plastics firm under contract with Innotrap India Ltd. It consists of a square, plastic tube measuring about 6 inches long and one and one-half inches- square. The tube bends in the middle at a 30-degree angle, so that when the front part of the tube rests on a flat surface, the other end is elevated. The elevated end holds a removable cap into which the user places bait (piece of bread, or some other titbit). A hinged door is attached to the front endofthe tube. When the trap is “open”, this door rests on two narrow “stills” attached to the two bottom corners of the door.
The trap works with simple efficiency. A mouse, smelling the bait enters the tube through the open end. As it moves up the angled bottom toward the bait, its weight makes the elevated end of the trap drop downward. This elevates the open end, allowing the hinged door to swing closed, trapping the mouse. Small teeth on the ends of stills catch in a groove on the bottom of the trap, locking the door closed. The mouse can be disposed of live, or it can be left alone for a few hours to suffocate in the trap.
Shobha felt the trap had many advantages for the consumer when compared with traditional spring-loaded traps or poisons. Consumers can use it safely and easily with no risk for catching their fingers while loading. It poses no injury or poisoning threat to children or pets.
Shobha’s personal and informal inquiries with acquaintances and friends suggested that women are the best target market for the Mouse-Rid. Most women stay at home and take care of household chores and their children. Thus, they want a means of dealing with the mouse problem that avoids any kind of risks. To reach this market,
Shobha decided to distribute Mouse-Rid through grocery stores, and kitchenware stores. She personally contacted a supermarket and some departmental stores to persuade them to carry the product, but they refused saying that they did not sell such contraptions. She avoided any wholesalers and other middlemen.
The traps were packaged in a simple cardboard, with a suggested retail price ofRs.150 for a piece. Although this price made Mouse-Rid about five 1;0 six times more expensive than standard traps, those who bought it showed little price resistance.
To promote the product, Shobha had budgeted approximately Rs. 300,000 toward advertising in different women’s magazines, such as Grah Shobha, and Good Housekeeping. Shobha was the company’s only salesperson, but planed to employ sales people soon.
Shobha had forecasted Mouse-Rid’s first year sales at 2 million units. Through Aril, however, the company had sold only few thousand units. She wondered if most new products got to such slow start, or if she was doing something wrong.
Shobha knew that the investor group believed that Innotrap India Ltd. had a “once-in-a¬ lifetime chance” with its innovative mousetrap. She sensed the group’s impatience. To keep the investors happy, the company needed to sell enough traps to cover costs and make a profit.
1. Has Shobha identified the best target market for Mouse-Rid? Why or why not?
2. Does Shobha have enough needed data on consumer behaviour? What type of consumer research should Shobha conduct?
3. What type of advertising can influence consumers for this type of product?
Golden Glow Soap
Anil Mahajan absent -mindedly ran his finger over the cake of soap before him. He traced the name ‘Golden Glow’ embossed on the soap as he inhaled its unmistakable sesame fragrance. It was a small soap, almost like a bar of gold. There were no frills, no coloured packaging, and no fancy shape. Just a golden glow and the fragrance of sesame and Lucida font that quietly stated’ Golden Glow’.
Mahajan smiled wanly and clasped the soap in his hands, as if protecting it from an unseen predator. He was wondering with quiet concern if the 30-year-old brand would last long. Sensi India, where Mahajan was marketing manager, was taking a long, hard look at the soap, as it was proving to be a strain on resources.
There were varying stories about how Golden Glow was launched. Some said the brand was a ‘gift’ from the departing English parent company. Others claimed that it was created for the then chairman’s British wife, as the Indian climate did not agree with her skin. They also claimed that the lady also coined the copy “The honest soap that loves your skin” was also coined by the lady. The line had stuck through three decades. Only the visuals had changed, with newer models replacing the older ones.
Zeni was basically a speciality products company producing household hygiene, fabricare, and dental care products. Golden Glow was the only soap in its product mix, produced and marketed by Sensi. Its reliable quality and value delivery had earned it a lot of respect in the market. Golden Glow equity was such that Sensi was known as the Golden Glow Company. Indeed, the brand name Golden Glow denoted purity, reliability, and gentle skincare.
In 1994, Sensi UK increased its stake in the Indian subsidiary to 51%. Within months, all of Sensi’s products were given a facelift, thanks to the inflow of foreign capital. New packaging, new fragrances, new formulations and more variants were introduced.
Only Golden Glow was left untouched. For, although it had a growing skincare business following some strategic acquisitions in Europe in the early eighties, Sensi UK was not a soap company. The UK marketing team ran an audit of every brand and product in the company’s portfolio. But when it came to Golden Glow, it faltered. “We don’t know this one,” officials at the parent company said.
“We don’t want this one to be touched,” Mahajan had said protectively, a sentiment tliat was endorsed by the managing director, Rajan Sharma. “Golden Glow is too sacred, we will leave it as it is,” he said.
But the UK marketing team was confounded. What was a lone soap doing in the midst of toilet cleaners and fabric protectors; they wondered, however they somehow agreed that their proposed revamp strategy would only look at up-gradation, not tinkering with what wasn’t broken.
Indeed, for 30 long years no one had tampered with the Golden Glow brand. And Mahajan felt there was no reason to start now. Golden Glow, in his view, was a self-sustaining brand. That was a bit of an understatement because advertising for the brand was moderate and Sensi India had never used any promotional gimmick for it.
Now, after four years of nurturing the other categories, Sensi UK had decided to launch its Vio range of skincare products in India. But Golden Glow’s presence and profile was a major roadblock to Vio’s success. “It will create dissonance, confuse our skincare equity and deter the articulation of Vio’s credo. It will stand out as a genetic flaw,” argued the UK marketing head. “You need to do a rethink on Golden Glow.”
Mahajan protested. “Why? It has such a strong equity and loyal following. So much has been invested in it all these years. Why give up all that?”
Rajan, however, had another idea. “Let us then extend the Golden Glow brand.” He said It was the simplest solution. Companies were now investing heavily in creating new equities for their brands. But in Golden Glow’s case, Sensi was already sitting on a brand with a terrific equity. He felt that extending this equity to other categories, such as skincare products would be successful.
But Golden Glow needed a new positioning before it could be extended. Till a few years ago, it had been in premium category, priced at Rs.15. Then new brands with specific positioning and higher price tags entered the market. This created a level above Rs.15 soaps and pushed Golden Glow down to the mid-priced range. So Golden Glow’s price was not commensurate with its premium position and image.
Over the years, Golden Glow had become so sacred that Sensi India had been too scared to do anything to it. As a result, the soap was left with niche category of loyal users. This category neither shrank or increased, just kept getting older and older, and with it the brand also kept growing older. For example, when Mahajan’s wife had her first baby at 25, her mother had recommended Golden Glow for her dry skin and also for baby’s tender skin because it contained sesame oil. That was in 1979. Today, Mahajan’s daughter had turned 21 and was being wooed by Dove, Camay, even Santoor, and Lifebuoy Gold, with their aggressive advertising. Golden Glow had begun to lose its image of being contemporary as newer brands came in with newer values.
Today, at 46, Mahajan’s wife still used Golden Glow, but when she recommended Golden Glow to her daughter, she said, “But Golden Glow is a soap for mothers, for older people.”
That was a major problem. The Golden Glow brand had aged, and Sensi India hadn’t even been aware of it. While its equity had grown with its users, its personality had aged considerably in the last 30 years. “I don’t think you can keep the personality young, unless you keep renewing the brand. The objective now is to widen your equity so that your image becomes young,” continued Rajan. “For instance, if today you were to personify a Golden Glow user now, it would be a woman of 45 years using the same brand for many years, who is aver-se to experimenting, very skincare conscious, very trusting, and very one-dimensional. As you can see, this is not a very competitive personality. These are the strengths of our Golden Glow, but these are also its weaknesses,” he analysed.
The context had changed. Today, youth demanded brands that stood for freedom and fearlessness. They demanded bold brands that dared to cure, not just p;eserve. “Preservation is for old people. Those are the attributes being presented in evolved markets,” said Rajan. To make Golden Glow contemporary, the attributes had to be re-framed, he felt. “You can’t make a young brand trusting caring, loving, without adding other attributes to it. Today, youth stands for freedom, for laughter, for frankness, for forthrightness. That’s what Close Up, Lifebuoy Gold, Vatika, and other brands propagate. So, either come clean and say it is for older skin which needs trust and kindness, or reposition the brand,” said Rajan.
Repositioning was also necessary to address another anomaly in Golden Glow’s image: its perceived premium. Sensi India had been unable to do anything about Golden Glow slipping into the mid-price range following the entry of more expensive brands. Now, as Rajan mulled over the brand extension plan, Mahajan felt that Golden Glow’s premium positioning was its core equity and that had to be maintained.
“If you are premium priced in the consumer’s mind, your extensions are automatically perceived as premium. So, if you don’t present the other products as premium, the consumer will not see them as extensions of the brand,” he said. “For example, if you are to launch a shampoo which is priced lower than Sunsilk, but higher than Nyle and Ayur, then whatever the rationale, the consumer will not accept your product. “It is not the Golden Glow I know,” will be the feeling,” he said.
Mahajan felt that since premium positioning was one of Golden Glow’s equity values, it would be very difficult to convince consumers that the brand was being extended without hanging on to this particular value. “Will they buy your rationale that the very same values and equity would now be available at a low price? To be in the premium segment now, you have to price it at Rs 35 or 40, almost on a par with Dove,” he said. “With Dove retailing at Rs 45, Golden Glow will be perceived as a cheaper option.”
“We can’t simply raise the price,” said Rajan. “What are we offering for that increase? You can ‘t add value because you don’t want to tamper with the brand. The consumers will then ask, “Golden Glow used to be so cheap, what has happened now? The user will forget that 15 years ago, Rsl0 was expensive, because all her comparisons would be in today’ s context,” said Rajan.
“So what’s the option?” asked Mahajan. “You don’t have to be expensive to be premium,” said Rajan. Golden Glow already has the image of a premium brand, thanks to its time-tested core values of purity, credibility, and reliability. What we can do is reinforce the premium through communication and positioning. In fact) we should have tinkered with Golden Glow long ago. That is what HLL did with Lux. It also launched a bridge brand, Lux International, in the premium category,” said Rajan.
“How could we have done anything to the brand?” asked Mahajan. “The product had such a strong following. It stood for gold, for sesame oil, for its subtle earthy perfume. We changed the packaging periodically, but that’s all we could do. Remember the time we brought out a transparent green Golden Glow with the fragrance of lime? It bombed in the market.”
Rajan was not in favour of the premium positioning. It appeared very short sighted to him, given the bigger plan to extend the brand. “Where are the volumes in the premium segment? He asked. “For some reason, every manufacturer feels that skincare can be an indulgence of only the moneyed class. As a result, there is a crowd in the premium end of the market. Do we want to be yet another player in the segment?”
Fifteen years ago, Golden Glow was perceived as a premium product. But today, globa1brands like Revlon, Coty, and Oriflame were delivering specific premium platforms. Golden Glow did not have a global equity. ‘Let us revisit the brand and examine what it stood for 15 years ago and examine the relevance of those attributes in today’s context,” suggested Rajan. “Golden Glow stood for care, consciousness, love, quality and all that. But today, are these enough to justify a premium position?” he asked Mahajan. “These attributes are viable in the mid-priced segment.” He said.
“The mid-priced brand is the proverbial washer-man’s dog,” said Mahajan. “You don’t know whether you are at the bottom end of the premium range or at the top-end of the low-priced range. You end up creating an image of being on the opportunity fence. It is a mere pricing ploy, with no strategic value.”
1. Discuss the nature of problem(s) in this case?
2. Suggest the kind of consumer research needed?
3. How should Golden Glow be positioned/ repositioned to bring about the desired change among consumers? Give your reasons.
Impact of Retail Promotions on Consumers
Shoppers’ Delight, a large retail store, had above-average quality and competitive prices. It advertised its retail promotions in local newspapers. Its TV advertising was mainly aimed at building store image and did not address retail promotions. The management knew it well that they had to advertise their retail promotions more, but they did not feel comfortable with the effectiveness of present efforts and wanted to better understand the impact of their present promotions.
To better understand the effectiveness of present efforts, a study of advertising exposure, interpretation, and purchases was undertaken. Researchers conducted 50 in-depth interviews with customers of the store’s target market to determine the appropriate product mix, price, ad copy and media for the test. In addition, the store’s image and that of its two competitors were measured.
Based on the research findings, different product lines that would appeal to the target customers were selected. The retail promotion was run for a full week. Full-page advertisements were released each day in the two local Hindi newspapers, and also in one English newspaper that devotes six pages to the coverage of the state.
Each evening, a sample of 100 target market customers were interviewed by telephone as follows:
1. Target customers were asked if they had read the newspaper that day. This was done to determine their exposure to advertisement.
2. After a general description of the product lines, the respondents were asked to recall any related retail advertisements they had seen or read.
3, If the respondents were able to recall, they were asked to describe the ad, the promoted products, sale prices, and the name of the sponsoring store.
4. If the respondents were accurate in their ad interpretation, they were asked to express their intentions to purchase.
5. Respondents were also asked for suggestions to be incorporated in future promotions targeted at this consumer segment.
Immediately after the close of promotion, 500 target market customers were surveyed to determine what percentage of the target market actually purchased the promoted products. It also determined which sources of information influenced them in their decision to purchase and the amount of their purchase.
Results of the study showed that ad exposure was 75 per cent and ad awareness level was 68 per cent and was considered as high. Only 43 percent respondents exposed to and aware of the ad copy could accurately recall important details, such as the name of the store promoting the retail sale. Just 43 per cent correct interpretation was considered as low. Of those who could accurately interpret the ad copy, 32 per cent said they intended to respond by purchasing the advertised• products ‘ and 68per cent sad they had no intention to buy. This yields an overall intention to buy of 7 per cent. The largest area of lost opportunity was due to those who did not accurately interpret the ad copy.
The post-promotion survey indicated that only 4.2 per cent of the target market customers made purchases of the promoted products during the promotion period. In terms of how the buyers learned of the promotion, 46 per cent mentioned newspaper A (Hindi), 27 per cent newspaper B (Hindi), 8 per cent newspaper (English), and 15 per cent learned about sale through word-of mouth communication.
The retail promotion was judged as successful in many ways, besides yielding sales worth
Rs 900,000. However, management was concerned about not achieving a higher level of ad comprehension, missing a significant sales opportunity: It was believed that a better ad would have at least 75 per cent correct comprehension among those aware of the ad. This in turn would almost double sales without any additional cost.
1. Why would some consumers have high-involvement levels in learning about this sales promotion?
Consumer involvement is defined as a state of mind that motivates consumers to identify with product/service offerings, their consumption patterns and consumption behavior. Involvement creates within consumers an urge to look for and think about the product/service category and the varying options before making decisions on brand preferences and the final act of purchase. It is the amount of physical and mental effort that a consumer puts into a purchase decision. It creates within a person a level of relevance or personal importance to the product/service offering and this leads to an urge within the former to collect and interpret information for present/future decision making and use. Involvement affects the consumer decision process and the sub processes of information search, information processing, and information transmission. As Schiffman has put it “Involvement is a heightened state of awareness that motivates consumers to seek out, attend to, and think about product information prior to purchase”. It is the perceived interest and importance that a consumer attaches to the acquisition and consumption of a product/service offering.
Herbert Krugman, a researcher is credited with his contribution to the concept of consumer involvement. According to him, consumers approach the marketplace and the corresponding product/service offerings with varying levels and intensity of interest and personal importance. This is referred to as consumer involvement.
Involvement of consumers while makes purchase decisions varies across persons, across product/service offerings in question as well as purchase situations and time at hand. Some consumers are more involved in purchase processes than others. For example, a person who has a high level of interest in a product category would expend a lot of time making a decision with regard to the product and the brand. He would compare brands across features, prices etc. Another example is a person who is risk aversive; he would also take a longer time making a decision. Involvement also varies across product/service offerings. Some products are high involvement products; these are products that are high in value and expensive, possess sufficient amount of risk, are purchased infrequently, and once purchased, the action is irrevocable, i.e. they cannot be returned and/or exchanged . On the other hand, there are low involvement products, which are moderately expensive or generally inexpensive, possess little risk and are purchased regularly on a routine basis. Further, such consumer involvement based on their personal traits or on the nature of product/service offering are also impacted by the buying situation and time in hand for making purchase decisions. Very often, due to time constraints or emergency situations, a consumer may expend very little time on the purchase decision and buying activity in spite of the fact that the consumer is highly involved or risk aversive or the product is a high involvement one.
2 Is a level of 75 per cent comprehension realistic among those who become aware of an ad? Why or why not?
The goals of comprehension realistic awareness of advertising do not usually involve making money in the short term. Awareness advertising seeks to increase the name recognition of your small business in the minds of consumers across your target market area. These advertising objectives are particularly useful in the early days of your company when you don’t have as many
Awareness advertising is a marketing strategy designed to increase consumer familiarity with your company’s overall message and the services or products it offers. How awareness advertising develops goals and objectives for your small business depends on your target consumer market and the company image you wish to portray. According to the Small Business Notes website, these goals are essential to developing your awareness advertising strategy and determining how much money to spend on your promotional campaigns.
Brand awareness is an overarching objective of your awareness advertising strategy. This marketing phenomenon is the extent to which consumers recognize the brands of your small business and can correctly associate these brands with particular product offerings, according to the Business Dictionary. Increasing brand awareness is a primary aim in the early months of small business life, when your company is attempting to enter the local marketplace and garner consumer attention. Raising brand awareness through advertising keeps your small business in the minds of consumers, which can lead to increased traffic at your place of business.
The message your small business chooses to convey cannot be vague or easily misinterpreted. The more room you give consumers to confuse your company message, the easier it will be for your target market to make false assumptions about your brands and products. Conveying a clear, strong message through your advertising campaigns gives consumers your product messages in ways that are easily understandable and memorable. This allows for greater retention of your message and easier recognition when consumers come across your company’s products or enter your business locations.
Awareness advertising seeks to increase your company’s market share by increasing consumer knowledge of your small business’s products and services. Advertising campaigns saturate the market in an attempt to drown out the voices of your competitors. If your advertising campaigns follow the rules for simplicity and memorability, consumers may begin to frequent your business, giving you the opportunity to steal sales from the competition on a permanent basis.
3. Do you think such promotions are likely to influence the quality image of the retail store? Explain.
Martineau gives the retail store image first. He thinks that the retail image is “personality of the retail store”. He reckons that the definition given by consumers is very important to affect their patronization the store.
Arons(1961)&Dichter(1985) think retail store image is an individual’s cognitions and emotions that are inferred from perceptions or memory inputs that are attached to a particular store and which represent what that store signifies to an individual. Keaveney& Hunt takes retail store image as an overall impression of a store as perceived by consumers. Store image is the subjective feeling got by the store information, this image is based on the personality of consumers’. This view is accepted by more and more scholars. And, some researchers not only test the subjective of the store image, but also point out the influence store image theory.
Wyckham (1967)emphasizes the consumer’s subjective feeling in his research and tests one of the factors by empirical ways. He connects the consumer’s shopping experience and store image, and reckon “ the feeling and experience have certain relationship”. When consumer has happy experience, and he will have good image; then will have bad image. According to the definition of the retail image, we can get the result that the recognition of the retail store is based on the reaction to the store. And this recognition can be emphasized. So, this research takes the retail information as the result of the emphasize of the store. Retail image is produced by the consumer’s feeling. Different consumers have different recognitions according to their
knowledge, education and life style.
The above segmentation distinguishes the factors which may affect the retail store image from different angles. The definition for service is further more different, which just indicates the complexity of service. Taking James Reardon(1995)’s segmentation for example, convenience could also be treated as service provided to customers, which makes the practical verification more difficult. It is because of the different recognition to service factor .