Consumer Behaviour

INTRODUCTION

 

 

            Many businesses exist and flourish because they are successful in satisfying a need in the market. These needs are determined by the consumers who are considered an important component of any business endeavor. The primary reason for a business existence is to continue identifying consumer needs and then come up with tangible responses to address these needs. This requirement makes business companies spend a considerable amount of effort and intellect in analyzing the behavior of the consumers in order to effectively formulate appropriate marketing strategies that would assist the firm in effective production and delivery. Perner (2006) argued that the study of consumers makes companies and organizations recognize and internalize consumer issues that would help strengthen their marketing strategies. These issues are: the psychology of how consumers reflect, feel, rationalize, and choose between different alternatives of products and services; the psychology of how social groups affect the consumer’s decision; behavior of consumers in formulating marketing decisions; how limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;  how consumer enthusiasm and decision strategies vary between products considering their level of importance or interest to the consumer; and how marketing strategies can effectively adapt to successfully connect with the consumer.

ADVERTISING IN E*TRADE HONG KONG: Ferrari Television Advertisement Campaign

 

 

            E*Trade Financial offers comprehensive and personalized financial services solutions ranging from brokerage, banking and lending. E*Trade Financial operates branded web sites in fourteen countries including the United States, Canada, United Kingdom, France, Germany, Estonia, Sweden, Denmark, Finland, Iceland, Australia, Japan, Korea and Hong Kong and a global institutional web site. The company’s operation extends to about 4.3 million active retailer clients and is in charge of US3 million global customer assets as of March 2006 (cited in the company’s website 2006).

            E*Trade Hong Kong’s ‘Ferrari’ television advertisement campaign in Hong Kong was recognized by AXN Network, Asia’s all action and adventure cable and satellite television network, as a “high octane, provocative and exhilarating television advertising in Asia.” The recognition placed the television advertisement campaign at the number one spot. The honor also affirms the company’s commitment to escalate recognition of its global brand and its effort to strengthen its revenue diversification strategy designed to adapt to the varying financial needs of its worldwide customer households. Jarrett Lilien, Chief Brokerage Officer and Managing Director in the Asia-Pacific and Latin America operations stated that the number one ranking portrays E*Trade Hong Kong’s ability to relate well with its audience in its determination to establish its brand in major international markets. The praised advertising campaign and the company’s entire international advertising and marketing presence distinguish it from the rest of the competition and serve as the avenue of the company to communicate the true value of its integrated product offering to the consumers and thus intensify its global leadership (Top Ranking 2001, p.1).

 

TSINGTAO BREWERY COMPANY LIMITED: Advertising Campaign for Tsingtao Beer

            In August 1903 the first brewery set up with European technology in the ancient Chinese mainland was established under the name Nordic Brewery Co., Ltd., Tsingtao Branch. After 100 years of struggles, the original brewery has evolved into Tsingtao Brewery Co., Ltd, the manufacturer of the world famous “Tsingtao Beer”. The 1990′s paved the way for the company strategy of “Great Famous Brand” which was solely applied to Tsingtao Brewery Co., Ltd. The company gained a reputation for being a pioneer in the beer industry to execute and maintain an enterprise culture characterized by a management pattern of “systematic integration and mechanism innovation”. However, in recent years, the company witnessed an alarming decline in sales of the famous Tsingtao Beer.  To counter the decline, Tsingtao Brewery Co. Ltd. ended partnership with its distributor, China Beer (Hong Kong) Co. Ltd., and collaborated with Tsingtao Beverage (Hong Kong) Co. Ltd.  Tsingtao Brewery is aware of a strong need for a creative advertising campaign that can measure up with profoundly advertised competitors Heineken and Carlsberg and encourage more drinkers in the territory to choose Tsingtao. Tsingtao executives worried that the absence of a persuasive advertising strategy would result to total recognition of its brand as a local image of a dull beer for older people (Beveridge 1999, p.1).

ANALYSIS AND CRITICISM OF THE TWO COMPANIES’ ADVERTISING STRATEGIES

 

 

Perception

            Perception in consumer behavior is the process that consumers undergo in interpreting any stimuli presented to them by the environment (Stumpf 1998). According to Perner (2006) several factors affect consumer perception. Exposure determines the extent to which a consumer comes face to face with commercial messages in his daily routine. Exposure is random since the consumer does not have any control of its occurrence. Therefore, advertising should be readily available where the consumer is.             E*Trade’s Ferrari advertisement campaign was done on television which is a prevalent source of many information regarding products, goods, events and community issues for most people. Tsingtao lacks a creative advertising mechanism for its Tsingtao beer as verbalized by their management making their overall marketing strategy ineffective. Perner (2006) added that for any exposure to become a significant part of the consumer conscious process, attention must be present. Attention can vary in degree but this degree can be influenced by the consumer’s interest or need for a particular product. Finally, interpretation comes when the consumer literally makes sense of the meaning of the advertisement as well as its psychological meaning (Perner 2006). E*Trade’s advertising style effectively communicates the value of the company’s financial services making the consumers aware what the company wants and can provide to them. Tsingtao’s Beer may have been a world famous beer but the company has to reiterate to the consumers’ minds why the beer gained that reputation in its advertising efforts.

Motivation

 

            Motivation relates to a person’s recognition of a need and desire to address that need and achieve a certain outcome.  Customer’s motivation in making purchase decisions can be influenced by his financial position, time constraints or quick access to the product; general value for his money, and perceived risk or consequences if the purchase decision does not satisfy his need.  Motivation is also directly linked to the concept of consumer involvement, which is the amount of effort the consumer will exert in making a decision.  Advertisement and marketing strategies should prepare options that would stimulate high level of consumer involvement thru providing access for the consumer to learn about the product (information on website, free video preview) or allow customers to experience the product though a free trial before committing to the purchase (Principles 2006).  E*Trade’s advertising strategy exhibits the desire for consumer involvement thru providing a chance for consumers to learn about their products. It utilized the television in order to communicate its message about its products. Most consumers spend time on the television and this medium made E*Trade effectively target numerous consumers in a short period of time and with lesser effort. Tsingtao does not have any conceptualized mass media advertising which would have been a good strategy to stimulate the minds of the consumers about the popularity of the product and why it is considered world-famous.

The Self (Personality and Lifestyle)

            An individual’s personality is the wholeness of the individual’s attributes and characteristics that he exhibits to the social environment as well as his own vision of himself (self-concept). Consumers often make purchases to sustain their self-concept thus marketers can pattern their marketing strategy around basic cues about the consumer’s personality such as age, occupation, income, interests, values etc. Lifestyle, on the other hand, describes the way an individual goes about in the daily activities he engages in and daily interests he pursues. Lifestyle is often determined by how one spends his time and money (Principles 2006). E*Trade is a global company that serves individual consumers and business organizations for their brokerage, banking and lending needs. In today’s capitalistic and economic living, managing finances is crucial. E*Trade aspires to meet this need by providing its unique services to professionals and global corporations who want to ensure the safety of their financial resources. AXN Network’s label that E*Trade’s advertising is “high octane, provocative and exhilarating” depicts the company’s aim to tailor their products to the aggressive and invigorating lifestyles of most people in the modern world. Tsingtao management, on the contrary, fear that their brand is acquiring a local and dull image. This is basically due to the absence of a concrete marketing strategy that should delineate what particular groups of people Tsingtao Beer serves and how this would help complement their lifestyles.

 

 

Learning

            Learning is a process of modifying and changing personal behaviors and knowledge through experience or conditioning. The behavioral learning theory advanced that learning takes place from exposure to exogenous stimuli such as advertising while the cognitive learning theory stipulates that consumer learning occurs by a process of internal knowledge transfer (ICFAI 2001). Many contemporary advertisers use classical conditioning. For example: beautiful woman (unconditioned stimulus) results to emotional arousal in men (unconditioned response). Also, the consumers sometimes learn by observing the impact of a product on people who used it (Perner 2006). E*Trade’s advertising campaign is done in an exciting and provocative way which would result to an emotional arousal on the audience watching it. By watching the advertisement, the audience would be able to gain additional knowledge on the company’s products. Furthermore, the recognition given by an outside organization gives more value to the advertisement. This honor can be regarded as the impact of the advertisement to the consumers. Both the provocative portrayal and the recognition are advantageous to E*Trade as they enhance the consumer’s perception of the quality of their products. Tsingtao Beer, on the other hand, is not promoted creatively so its world wide fame is not reinforced to the consumers thereby making the consumer’s knowledge about the product limited or obsolete.

 

 

Attitudes

            Attitudes basically refer to how a person carries out his beliefs towards various situations or objects in the social world.  Formed attitudes can be very difficult to modify.  Thus, negative attitudes toward a product require marketers to work out ways to determine the key issues shaping a consumer’s attitude then adapt advertising efforts accordingly to change the attitude (Principles 2006). E*Trade generally has no problem with this component of consumer behavior. Its advertising strategy is praised and the company has earned loyal customers who enjoy their products. This concept is of extreme significance to Tsingtao though. The officers of the company are anxious that the people are already looking at their trademark beer in a negative way i.e. local beer of dull quality for older people, which resulted to decline in sales. They have to immediately address this issue by formulating strategic ways to change the perception of the consumers towards their product.

Culture

            Culture is the complex set of behaviors, beliefs, traditions and lifestyles shaped by an individual’s interaction with or observation of other members of society.  Within the culture is the existence of sub-cultures which comprise the shared values within the smaller groups based on ethnicity, religious beliefs, geographic location, and special interests. Culture prescribes the acceptable product advertising in a particular country encouraging marketers to often use cultural representations in their promotional activities. The purpose is to make the customer feel more comfortable and identify with the product as it does not contradict his cultural behaviors and values (Principles 2006). Hong Kong is a city with many personalities. Its culture is a blend of East and West where modern skyscrapers and executives with cell phones or laptops interact daily with fruit hawkers in traditional broad, woven straw hats. Hong Kong is one of the most progressive cities in Asia with enormous business opportunities and emerging Western lifestyles. Modernization is already imbedded in the Hong Kong culture and any product or service that would complement this modern day lifestyle is welcome (Hong Kong Culture 2006). E*Trade offers an integrated financial service to global firms, retailers and professional consumers. Its operation is recognized in numerous countries and its advertising campaign consistently promotes its global brand. This advertising produces effective results to the company be ensuring its global presence and maintaining consumer loyalty with its international reputation. Tsingtao Beer also has an international name but Tsingtao Brewery’s advertising campaign does not reinforce this. It has no persuasive marketing efforts that would encourage consumers to patronize its products. Beer drinking is also a characteristic of modern living in Hong Kong and this fact can be utilized by Tsingtao in coming up with its advertising strategy.

RECOMMENDATIONS FOR TSINGTAO BREWERY CO. LTD.  

 

            Generally, Tsingtao Brewery lacks a comprehensive, creative and persuasive advertising campaign that compromised their sales performance. First of all, Tsingtao employees and management have to sit down together to come up with potent measures to promote their product or reinforce its world-wide reputation. The basic problem to be addressed is the possibility that the company’s lack of advertising efforts in light of their competitors’ (Heineken and Carlsberg) extensive promotions lessen the consumers’ interest on their product. Attitudes toward a product can be changed by highlighting new functions of the product, or by associating them with celebrities, by changing the beliefs a consumer has regarding the products, or by getting the consumer more involved in the product (ICFAI 2001). Tsingtao Brewery can also adapt its advertising strategy to the Hong Kong and Chinese cultures. Beer drinking is not prohibited in the two cultures and the modern lifestyle in the country also calls for leisure and recreation. Tsingtao can position their Tsingtao Beer as an ideal mate during leisure moments away from the hassles of work and daily living. Finally, Tsingtao Beer has already established its image as a global brand and this usually connotes loyal customers. In order to effectively re-position the product, Tsingtao has to identify these loyal consumers and learn what kind of image they have attached to the product. Certain tools such as Q sort, rating scale, and checklist can be used to measure an individual’s self-concept and also find out whether there is a significant relationship between the consumer and the product’s image (ICFAI 2001).

 

Credit:ivythesis.typepad.com