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

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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

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Starbucks Location - Exterior

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Starbucks Location -Interior

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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

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Consumer Purchasing ProcessProblem/

NeedRecognitio

nInformation Search

Evaluation of

Alternatives

Purchase Decision

Post Purchase

Evaluation

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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

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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

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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