IMC 2011 by ARM
Session 3
Ali Raza Merchant
IMC CourseConsumer Buyer
Behaviour
IMC 2011 by ARM
How to take advantage of each stage in the consumer purchase decision
Target ads and other marketing communications to meet emotional and logical needs of consumers
Refine knowledge about how attitudes and values are reflected in buyer behaviour
Discover traditional factors that affect consumer purchasing decisions
Understand how new trends in society affect purchasing processes
Topic Objectives
IMC 2011 by ARM
Starbucks began as a coffee importing firm
Howard Shultz an employee, toured Italy in 1980 and watched city dwellers stopping at a coffee bar every morning
Shultz comes back and tries to convince owners of Starbucks to do something similar in USA but gets turned down
Shultz quits the job, raises money from investors and opens a Café in Seattle using the name Il Giornale
Starbucks - Backgrounder
IMC 2011 by ARM
Within 15 years, Starbucks expanded to 1200 retail outlets
Success factors include:Product itselfLocationsEmployeesSourcing Effective marketing communications
The nonchalance of competition was also a factor
Starbucks - In 2003
IMC 2011 by ARM
Starbucks - Videos
A look intoThe future
Of Starbucks
Starbucks 2011 TVC
Thematic
Starbucks Vote TVC
CSR
StarbucksGold Coast TVC 2008
IMC 2011 by ARM
So What Did Starbucks Do???
Going to Starbucks should be an experience, a special treat; the stores should be a place to meet friends and
visit
The Big Idea
Italian coffee-bar culture in the United States could be Starbucks' differentiating
factor
IMC 2011 by ARM
Starbucks ProductStarbucks offers both straight and diluted creamy drinks like
caffe latte(Espresso mixed with steamed milk
covered with a topping of foam
Other Products include:
CappuccinoCaffe Mocha
Basic Ingredient Coffee is never more
than an hour old
IMC 2011 by ARM
Starbucks Location - Exterior
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Starbucks Location -Interior
IMC 2011 by ARM
Starbucks Location - Facts
•Café’s must be easily accessible on commuter routes•In each café there are numerous enticements like:• Jazz music in background• Merchandise like stainless steel
thermoses, commuter mugs, filters, natural hairbrushes for cleaning coffee grinders and home epresso machines
IMC 2011 by ARM
Starbucks Employees
• Called Baristas, Italian for Bar Person• Motivation programs including buy-in options• Encourages Baristas to provide high end
service•Extensive Training to become experts in coffee
vending• Starbucks insists on a diverse work force
reflecting make up of community
IMC 2011 by ARM
Starbucks Sourcing Advantage
•The firm is vertically integrated and relies on quality suppliers from around the world
•Each region grows beans with distinct flavors for coffee connoisseurs
•Starbucks brings all of the flavors to a single location for purchase
IMC 2011 by ARM
Starbucks Marketing Coms Program
•Many Gen X type customers found coffee shops to be an alternative to the bar scene and made purchases accordingly
•Baby Boom Generation could discuss coffees such as the Jamaican Blue Mountain with as sophistication as they discussed wines
•Expansion through alliance with Barnes & Nobles, Holland America Cruise Lines, United Airlines
Challenge 1 Convincing
Price Conscious
buyers to shift away from old
purchasing habits
Challenge 2 To counter
caffeine usage as a bad habit and encourage coffee drinking
Primary Target
Market 1Younger Gen X
types inhabiting
Seattle Area – Hang out
places for a long time
Primary Target
Market 2Baby Boom
Gen People in 40s and 50s
consuming less alcohol with a degree of snob
appeal
IMC 2011 by ARM
Starbucks Competitors - Complacent
•Simply ignored the potential of gourmet coffee
•The idea of vending coffee in a café seemed so far fetched to them that they did not view Starbucks as a threat, even as Seattle became known as “Latteland”
•Today Starbucks has as much name recognition and more brand loyalty compared to its major competitors
Owned by General Foods
Owned by P&G
IMC 2011 by ARM
Consumer Purchasing ProcessProblem/
NeedRecognitio
nInformation Search
Evaluation of
Alternatives
Purchase Decision
Post Purchase
Evaluation
IMC 2011 by ARM
Problem / Need RecognitionNot Necessarily a Cognitive
Event
Waiting at a checkout counter &
reminded of Cigarettes or
Mints
On a holiday & running out of batteries for
Digital Camera
The smell of fresh biscuits in a bakery making
you purchase them
IMC 2011 by ARM
Information Search
Ability to
Search
Costs
Benefits
Motivation
Education / Knowledge of
Product Category
Level of Involvement
Need for Cognition
Level of Shopping Enthusiasm
Higher Search Effort if
Perceived Benefit is Greater
Actual Cost of Product
Opportunity Cost of foregoing activities like TV
IMC 2011 by ARM
Evaluation of Alternatives
Evoked Set
Method
Affect Referra
l
The Multi –
attribute Approach
Evoked Set consists of the brands he or she considers in a purchasing situation
E.g. Top recalled brands used or unused
Consumers beliefs about a brand’s performance on each attribute
Importance of each attribute to the consumer
E,g, Mac v/s PC
The consumer chooses the brand he /she likes
Generally low involvement products like toothpaste, milk, soft drinks etc
IMC 2011 by ARM
The Purchase Decision
1. Situational Changes
3. An
Impulse Purchase
2. Desire
for Variety
May purchase something else due to low on cash, buying a less preferred brand from a nearby store
To satisfy an internal need for variety
Trying a diet drink occasionally
Mostly a one time exception
The best alternative may be ignored for chewing gum etc at checkout counters
4. Advertisin
g, CP & other
marketing material
Buying a different brand of cheese due to a discount coupon of 1+1 deal
5. Impact of Friend or Family
Ordering more expensive items in restaurant to impress friends
IMC 2011 by ARM
Post Purchase EvaluationConsumer Evaluates what was expected v/s what actually occurred
Customer is satisfied if it meets expectations
In post purchase evaluations consumers compare the brand they chose with the brand they didn’t buy
Post Purchase Cognitive Dissonance
In cases where customer has spent time, money and ego consumer often doubt after purchases
They may therefore continue to pay attention to ads to reduce tension associated with Cognitive Dissonance
IMC 2011 by ARM
Atrium Cinema Karachi
Evaluate how the cinema goers experience has changed? What is different in the offerings of Atrium v/s competition? Has it changed customer expectations? Compare Atrium Cinema on the following criteria:
Price Ambience & Service The movie experience Food, Beverage, Hygiene Its presence within the mall Its location Other services like valet Overall value for money Rate the services on scale of 1 to 10 (1 lowest& 10 highest)
Exercise for Class Groups