Study Center Sydney Faculty of Business Assignment 2 Analysing Consumer as Individual 2 TABLE OF CONTENTS: Introduction.............................................................................................................. 3 Individual influences................................................................................................. 4 Perception.................................................................................................................... 4 - 5 Motivation.................................................................................................................. 5 - 6 Impact of perception and motivation consumer purchase decision.............................. 6 - 7 Need recognition............................................................................................. 7 Information search........................................................................................... 7 Evaluation...................................................................................................... 7 Purchase & Post-purchase behaviour............................................................... 7 Perception and motivation in improving Between the Flags Organisation marketing strategies ............................................................................. 8 - 10 Conclusion ................................................................................................................ 10 References................................................................................................................. 11-12 3 Introduction: In order to survive in a competitive environment, an organisation must provide its target customers with more value than its competitors. The difference between all the benefits derived from the total product and all the costs of obtaining these benefits is known as the customer value (Ling et al., 2015). This implies that in order to provide superior customer value there is an obligation for the organisation to anticipate and react to customer needs faster and better than its competitors. Consumer behaviour is the discipline which deals with how and why consumers purchase or do not purchase a product or a service. Consumer behaviour tends to be a person, a product and situation specific. (Salomon, 2011). Consumers’ behaviours are affected by individual influences such as perception, learning and memory, motivation, personality and emotion and attitude and attitude change. Furthermore these individual influences have an impact of the consumer decision making process. (Quester et al., 2007). This report will focus on two individual influences perception and motivation. Perception implies that an individual is imposing an order on sensation by selecting, organising and interpreting that sensation. While motivation is seen as a goal-directed behaviour. Eventually there is a requirement for managers to understand consumer behaviour and familiarise with factors for the purpose of making better marketing decisions and a need of knowing their market (Roszkowska-Hołysz, 2013). This report purpose will examine numerous literatures in order to understand the importance of perception and motivation on consumer decision making process. Along based on the various theories this report will evaluate the impact of perception and motivation in Between the Flags organisation, a beach supplier based in Australia since 1994 and recommendations will be provide in order to this firm to improve its marketing strategies (Between the Flags, about us). 4 Individual influences: The examination of customers as an individual is known as internal influences. These influences integrate inputs from individual psychology such as motivation, learning theory, personality and attitudes (Quester et al., 2007). Perception: Consumer perception is defined as a process through which information is acquired from the environment via our senses and is transformed into experiences such as events, sounds and tastes (Ling et al., 2015). Similarly Schiffman (2011) points out perception as a process where physical sensations such as sight, sounds and smells goes through a process of selection, organisation and interpretation. On the other hand Poulos (2001) refers to perception as the relationship of an individual with the external environment. This definition stress on the involvement of an individual actively trying to impose on their own experience of the environment stimuli. The perception process will then act as a filtering, through the selection of some stimuli and exclusion of other stimuli. Ling et al. (20015) and Schiffman (2011) also support the idea of Poulos (2001) that a function may vary from individual to individual depending on the stimuli they filter, the organisation and the interpretation they place on it. Interpretation is a function of individual, in addition of stimulus-related and situational characteristics. Some examples are Cognitive interpretation and affective interpretations. While cognitive interpretation involves a process whereby new stimuli are placed in existing categories, affective interpretation is the emotional of response triggered by the stimulus (Ling et al., 2015). These definitions reflect that perception is both functional of environmental characteristics as well as perceiver characteristics. It is interesting to note that the picture which is then constructed may give organisations ideas for market segmentation and positioning (Poulos, 2001). Marketers also make use of perception as a mean to communication with customers by creating a relationship between their products or services and the desired attributes (Salomon, 2011). The process of perception is highly individual and begins with the presence of different stimuli such as advertisements, messages, brands, product information and slogans as well as experiences which is followed by exposure and attention. At this first stage a sensation is acknowledge but not yet converted into information. The next stage will involve a perpetual encoding and integration which ultimately be store in consumer’s memory (Schiffman et al. 2011). Perception has strategic implications for marketers as consumers formulate decisions based on what they perceive rather than on the basis of objective reality. Other factors such as motives, goals, previous beliefs, involvement influence have an impact over the nature of consumer perception, which explains why people see 5 what they see (Salomon, 2011). Moreover situational characteristics such as consumer moods, retail environment, time of the day, special events and unexpected events has also an influence on the consumer perception nature. Perception is created through Information processing which refers to a series of activity through where stimuli are transformed into information and stored. Marketing managers use their knowledge of information processing in a variety of ways (Ling et al., 2015). Furthermore Ling (2015) refers to perception as an approximation of the reality only; which is not a simple task for marketers. The first challenge of the marketer is to gain consumer attention; consumers are faced with technologies and abundance of information thus competing demands for their attention. With the facility of acquiring information consumer can, and do, change their attention span rapidly. The next challenge will be for marketers to make their best for consumers to have information understood correctly and remembered by consumers so that the message of the organisation through different channels has an impact on the decision-making process (Quester et al., 2007). Motivation: Poulos (2001) defines motivation as an approach explaining human behaviour in the examination of human needs. Motivation on the other hand is defined by Quester (2007) as an energising force that activates or triggers behaviour providing a purpose, a direction and drive to that behaviour, an accelerator and steering mechanism or consumer behaviour. On the same note Shiffman et al. (2011) refers to motivation as the reason for behaviour. Furthermore a motive is a construct which represent an unobservable inner force that stimulates and compels a behaviour response. This response will then provide specific direction to that response and drives the response until the inner force is satisfied. Three elements can be observed a triggering behaviour, a general direction of that behaviour and its persistence until satisfaction is achieved (Salomon, 2011). Various theories have tried to explain motivation, Maslow hierarchy of needs suggests that consumer moves up from physical, safety, love, esteem to self actualisation. While Aldelfer simplified Maslow theory into existence, relatedness and growth. This hierarchy may be helpful to marketers as it reminds that consumers may have different stages in their lives and a motivation for a product at the physiological stage such as medicines may differ from the ego needs, credit motivation may be more towards cards and credit cards (Ling et al., 2015). Other theories such as McGuire list of sixteen motives covering cognitive-affective, preservation-growth-active passive and internal and external categories. While Deci and Ryans developed the intrinsic motivation and extrinsic motivation. This theory implies a dynamic motivational aspect of human personality where intrinsic motivation will be associated with fun, interest and satisfaction; extrinsic motivation will be associated with some external demand, regulation and sanction. This implies that both intrinsic and extrinsic motivations influence consumer engagement (Yaoran, Sheldon & Rude, 2015). A motive is often stimulated at the first stage of consumer decision making process which is problem recognition. A motive is the perception between a desired state and an actual state, which are both sufficient to arouse behaviour and relatively important to the individual. Motives directing behaviour in 6 one situation may not exist in another situation or may be completely different from the motives shaping behaviour in that situation (Ling et al., 2015). Quester (2007), stress on the importance for marketers to identify the motives influencing their target markets. Research in indentifying these motives can provide marketers with constructive insights into how they can create strategies for different goods and services targeted at different market segments. Examples are advertising appeals which are used by marketers to connect with needs and motivations advertising can be divided into two parts rational and emotional to motivate customers. Rational advertising will have for effect to appeal consumer to connect with logical or practical motives. While emotional an appeal is naturally under the emotional dimension, emotional advertising appeals target social or psychological needs such as love and self esteem. Salomon (2011) stress that marketers should be aware that their products represent objects or goals which aim to satisfy outstanding needs of individual buyers. Marketers must be able to identify the motives of their targeted consumers as appealing to motives which underlie behaviour may often form the basis for advertising. Furthermore referring to Steve Job, “people don’t know what they want until you show it to them”, this implies that understanding motivations help marketers to choose the most appropriate approaches to influence consumer decisions (Ling et al., 2015). Impact of perception and motivation consumer purchase decision: The case of Between the Flags organisation Established since 1994, Between the Flags is a beach supplier, and uphold the spirit of Australia’s surf culture. The main products that they offered are Australian beach and lifestyle apparels and include various products such as beach towels, hoodies, t-shirts, shorts, swimwear, gaps and a new active range in store with online buying facilities through their website. The target market is men, women and children. Between the Flags uses geographic segmentation with stores situated in busy locations with high percentage of tourism such as Bondi Beach, the Rocks, Darling Harbour, Bondi Pavilion (Between the Flags, about us). According to Ling et al. (2015). The street shopping locations is a strategy in itself; the locations induce the mood to shop by offering variety and entertainment in an urban setting. This report will focus on one particular product Bondi beach Hoody and will concentrate on the Rocks store. Between the Flags provide a brand image Bondi playing on perception and motivation of consumer behaviours. Furthermore the store position choice though associated with the category development index between retailers, is Superior as it provides a basis for comparing category value created on the long run merchandising decisions, attracts buyers to a store (Cox, 2013). The brand name is strategic as it associated with one of the most famous beach in Sydney and gives the perception of fun. A brand image is defined by Salomon (2011) as a schematic memory of a brand. The brand image thus contains the target market’s interpretation of the product’s features, benefits, usage situations, users, manufacturers and some marketers’ characteristics. Thus a brand name is what we think that is perception and feel or motivates for consumption when we hear or see the brand name (Poulos, 2001). Maslow hierarchy of needs serves as a useful method of classifying needs, which allows examining the needs that certain products correspond to. This in turn 7 translates to messages, design and promotion strategy which acts as a basis of needs and benefit segmentation. Applying Maslow framework in Between the Flags organisation can be classified in the affiliation needs category, creating a community with general factors as social interaction, friendship. Maslow framework also assists in the understanding of different types of advertising. An example the advertising can be associated with social occasions, travel holiday to Australia emphasising facilities to meet and interact with others (Shiffman, 2011). Need recognition: A tourist is spending holidays in Australia or is at Circular Quay on a cruise holiday for one or more days. The need recognition is to buy a souvenir for themselves and / or for their relatives. Information search: The street shopping locations is a strategy in itself, the locations induce the mood to shop by offering variety and entertainment in an urban setting (Cox, 2013). Buyers can have advices from hotels, cruise staff or consumers who already paid a visit to the shop. Evaluation: Consumers perceived the country of origin with the quality; buyers have greater sensitivity to the product quality. An Australian brand will be more likely to be associated with quality (Ting, 2012). Consumers have two options whether buying in store or online. Rong-An, Yu-Chen & Shen (2005) describe on-line shopping for fashion as cognitive absorption experiences on the web are more likely to be influenced by extrinsic factors. Consumers are motivated to buy online as it is more convenient, and have some discount on shipping. However sometimes the perception of risk involved in online payment may limit the immediate sales performance of many websites (Ling et al., 2015). Henceforth, while a lot of decision process may occur as a result of virtual interface, a retail store with competent and honest salespeople may still be required to close the sale (Rong-An, Yu-Chen & Shen, 2005).The meaning that consumers allocate to words and parts of word is the basis for the selection of the brand name. Between the Flags can enhance their operations by viewing their outlets as information environment. Personal interest factors and stimulus are both used to attract attention to advertisements and packages (Ting, 2012). Purchase & Post-purchase behaviour: Customer experience is likely to be judged in respect to the contribution to value-in-use and thus propose that value-in-use mediates between experience quality and relationship outcomes. It is interesting to note that experience quality does not only includes the evaluation of the firm only but also of peer-to-peer and complementary supplier encounters. Thus customers will place greater emphasis on organisations practices that focus on the understanding and delivering of value-in-use (Lemke, Clark, & Wilson, 2011). Satisfied consumers will act as a referral for the other passengers on the cruise or friends and relatives coming to Australia. A consumer who identify himself or herself with 8 a brand will tend to commit stronger to that brand and generate word to mouth (Tuškeja , Golob & Podnar, 2013). Perception and motivation in improving Between the Flags organisation marketing strategies: The knowledge of the process of perception and motivation is very useful in the implementation or enhancement of the marketing strategies. This knowledge assist marketing managers in the formulation of media or retail strategy, advertisement designs and packages, in the development of a brand name and in the evaluation and regulating advertising (Poulos, 2001). Marketing managers make use of the perception and motivation knowledge in a variety of ways. Referring to the report attention drawn on the retail sector, marketing managers can enhance their operations by viewing their outlets as information environments (Ling et al., 2015). Stimulus and personal interest factors are used to attract consumers’ attention through advertisements and packages. Thus characteristics of the target market and the message are studied in order to ensure that accurate interpretation occurs (Salomon, 2011). Between the Flags geographic segmentation, in a busy area and high tourism sector is strategic tool. However the organisation does not pay a lot of attention on advertising. Poulos (2001) states that small brands perform better on rational appeal while established brands achieve better sales with emotional appeals, however it is thought that successful advertising combines both emotional as well as rational appeal. Similarly Ling et al (2015), emphases that emotional and rational brains work together rather separately however the emotional brain is the key driver. Furthermore the brain wired to respond emotionally hence advertising creates an emotion first then after attention later. An effective advertising will have for effect to stimulate emotional responses. Consumers are more likely to remember better emotional advertising and associate more positively with the advertised brand. Elements such as excitement, pleasure and happiness can be applied in the advertising to promote one of the best beaches in Australia as Bondi beach. Rational advertising connect with the rational brain as emphasis is on functional needs Between the Flags can use more effective advertising, rational elements such as unique feature of the brand, and popularity amount the tourism target can be promoted also on the website and through pamphlets or better billboards in front of the shop (Poulos, 2001). Marketers often try to influence positively consumer’s mood and coincide marketing activities with events that induce moods, an example was for the saint Patrick where mannequins were wearing green hoodies. Between the Flags tries to provide different hoodie from season to season with different colours and messages. At Between the Flags shop some consumers like the packaging but are not motivated by the message on the hoodie to buy or like previous designs and messages. Therefore the designer of the message must be careful when using techniques to gain buyers attention. For example, if humour is being used the perceiver is more likely to notice the joke but no other relevant features of the message (Poulos, 2001). Shiffman (2011) state that research confirm the fact that information may be 9 pushed into the background when using this type of message appeal. Packaging design at Between The Flags aims at gaining customer attention thus the packaging should stand out from its competitors. Individuals derive a sense of security from the consistency of marketing stimuli while on the other hand individuals pursue change as they may get tired overtime with the same packaging or advertisement. Changes range from minor alterations such as packaging to the introduction of modifications through product development (Salomon, 2011). Thus a change in a product image if too radical may alienate buyers and sometimes not changing it at all may also alienate buyers. . Referring to Weber’s law changes in packaging, advertising and products features need to be optimises only so that they are noticeable along consistent with the size of the object. Furthermore small changes are likely to be noticeable in large objects while large changes need to be made for them to be noticeable in small objects, thus will re state the challenges of marketers dealing with perception and motivation (Ling et al., 2015). In response with the challenges marketers have to undertake their own research. Marketers should also be aware of the possibility of losing sales if they do not undergo necessary alterations or if they are not aware of the nature of their product in this context. Characteristics of the target market and the message must be studied in order to ensure that accurate interpretation occurs. Between the Flags can undergo online feedbacks or in store in order to tackle these challenges (Poulos, 2001). Between the Flags positioned its hoody in terms of high price, which gives the perception of quality. However it may be seen as too expensive for some customers. It is interesting to note that marketing managers are increasingly using non-monetary promotions in order to avoid these adverse long-term effects (Buil, De Chernatony & Montaner, 2013). Between the Flags can make use of none monetary promotions such as free gifts or contests in order to promote its brand. Gift attractiveness is one of the most drivers of consumers’ overall evaluation of gift promotions, which is then followed by attitude towards the promoted brand, the perceived fit between the promoted product and the gift and the value expression and entertainment benefits perceive by consumers. Accordingly the overall of gift promotions with brand attitude has a positive attitude on consumers’ purchase intentions (Buil, De Chernatony & Montaner, 2013). Architectural element and lighting can be used as interesting tools in the marketing strategies in retail sector (Soar, 2009). Similarly Quartier, Vanrie & Van Cleempoel (2014), study stress on the importance of environmental design in the creation of pleasure in consumer experiences. Moreover conveying a desired store or service image, and promotion of specific behaviours may help towards this pleasure. High arousing colors may increase the likelihood of impulse purchases, uplifting music may promote prosocial. While aversive light may be link to fatigue or discomfort. These factors indicates the store personality, the space can heighten the pleasure. As a result customers may be encouraged to stay longer thus spending more (Rompay, 2012). Referring to Rompay (2012) studies Between the Flags offers well and spacious store however on deliveries day there are a lot of boxes at the front of the store due to limited place in the store room. This is an issue that must be tackle as the environment may have some gaps in the creation of pleasure. On the other hand Chebat & 10 Richard (2003) stress that the regardless of the prominence store atmosphere, consumers will pay close attention to the functional details and fit of garment. Between the Flag has been working a lot lately on its visual merchandising in order to create a unique identity through distinctive visual merchandising strategies. These strategies create a positive mood for consumers, aiming to increase purchase intention, store loyalty, repeat purchases and referrals. However results may vary due to difference in culture towards the symbolic messages created though the virtual merchandising (Chebat & Richard, 2003). Hence designing commercial spaces must be pleasurable for consumers as well as functional allowing for and stimulating and efficient commercial transactions. These strategies must also be in line with the distinct image or brand philosophy Between the Flags (Quartier, Vanrie & Van Cleempoel, 2014). Conclusion: This report stress on the importance of understanding consumer behaviour for the segmentation and positioning process of an organisation as well as formulating marketing strategies. Perception and motivation two individual influences have been identified and through various theories have been analysed. The result of this report states that perception and motivation impact on how organisation designs their strategies. However these two individual influences may be challenging due to an unstable environment. Consumers can access information rapidly and are surrounded by different promotions, thus the first challenge is to gain their attention. Marketers have the duty to know they market and can make use of perception and motivation to predict and influence consumers’ decision making process. 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