HK 2011 BUYER BEHAVIOUR ASSIGNMENT 1 Table of content 1. Introduction…………………………………………………………. 1 2. Market segmentation……………………………………………. 1 3. Product positioning………………………………………………. 2 4. Pricing …………………………………………………………………. 3 5. Distribution strategy…………………………………………….. 5 6. Promotion Strategy………………………………………………. 6 7. Product………………………………………………………………. 10 8. References………………………………………………………….. 12 1. Introduction The Sony Play Station Portable (PSP) has just approach into the Australia market. It packs a powerful multimedia punch and provides consumers to enjoy the favorite games, music, videos and photos instantly anytime. Factor in the PSP system’s brilliant high – resolution screen and cutting – edge wireless connectivity and internet browser. According to the leads over the pond at the register, Sony 185,000 PSP’s in the UK this past weekend, smashing the previous three – day record, set by Nintendo’s DC. Sony’s sales, said market watcher chart track, which provided the statistic, makes the PSP’s UK debut the most successful console introduction in the territory yet. The PSP went on sale in the UK on Thursday, 1st September, and chart Track’s total combines sales on that day plus those of Friday and Saturday Nintendo sold 87,000 DS handhelds in the first three days of the device’s availability, Blimey that’s a lot of PSP’s. 2. Market segmentation (D. Decision – process influences) 1. Do different individuals use different evaluative criteria in selecting the product? First of all, consumers consider a set of evaluative criteria before buying a product. Secondly, different customers would use different sets of evaluative criteria. According to the text book, “evaluative criteria are the various features a consumer looks for in response to a particular type of problem.” So that evaluative criteria depends on the person purchasing. For example, before purchasing a PSP, a consumer may concern with number of games available, screen resolution, and space of memory. These are evaluative criteria for people who just want to play games on the console. On the other hand, someone else could approach to PSP with a totally different set of evaluative criteria, such as number of movies available, shape, sound effect, speed for internet surfing. These criteria are used by people treat PSP as a multimedia entertaining machine. Therefore, for the same product, different individuals would use different evaluative criteria. 2. Do potential customers differ in their loyalty to existing products/brands? In this case, potential customers can be divided into two groups, users and stickto- Sony customers. Users will pay attention to new product and games; it’s relatively hard for them to be loyal to any existing products/brands. Sony Loyalty customers, which might be minority, will stick to their loyal brand, they will intend to buy new product from Sony, include PSP. 3. Product positioning (B. Decision-process influences) 1. Which evaluative criteria are used in the purchase decision? These evaluative criteria can be used in the purchase decision: • Price – Price is a fundamental evaluative criterion for most of customers. Customers have to be provided with relative purchasing power before they enter the purchasing process. • Battery consumption – Battery is an important evaluative criteria when purchasing a portable console, or portable multimedia player. Customers would prefer the battery can last longer for long usage time. • Memory space – Memory space relates to how many times that games can be saved, capacity for downloadable content, movie trailers and other essential information. Consumers would prefer a bigger memory while using. • Games – For loyalty and games players, games choice is very important. More games can be played with the console, more consumers would be attracted. For example, some consumers they might not plan to buy a PSP. But if they saw some games that they interested in, they might consider buying one. Moreover, games’ price is also an important evaluative criterion. The games’ price can influence the sale of the console because of games are complement goods to the console, if the price is too high, it will influence other consumers’ decision. • User interface friendly – Whether the console is easy-of-use. • Screen (resolution and size) – A high resolution screen can provide a better vision effect to players, such as color and the 3D vision. Some consumers would pay more attention to the vision effect. Besides large screen size makes better effect as well. • Multiplayer allowance – Multiplayer allowance could definitely bring more fun. It allows players play against the others by connecting consoles together. • Compatibility – Whether the console can be connected to other related consoles or computers for exchanging data and information. • Accessory – Accessories, such as memory stick Duo, AC adaptor, battery pack, headphones with remote control, soft case and wrist strap, car adaptor, accessory carrying case and cleaning cloth. Accessories also can be part of the evaluative criteria for consumers seek for better outfit. • Life – How long it can be used until it’s replaced by next-generation consoles, and secondly the usage life. • Warranty – Warranty is kind of the confident that the Company gives consumers. A good warranty condition can influence a consumers’ decision. • Loading time – Loading time which is the loading speed. It’s very annoyed by spending long time waiting until the game is loaded while playing. Less loading time refers to the hardware and space of memory. 4. Pricing (D. Decision – process factors) 1. Can a low price be used to trigger problem recognition? According to the text book, “Problem recognition is the first stage in the consumer decision process and it must occur before decision making can begin…the recognition of a problem is the result of a discrepancy between a desired state and an actual state which is sufficient to arouse and activate the decision process.” In this case, whether to purchase a PSP refers to the problem recognition. In current console market, PSP is the latest and the most expensive one, the official console price for PSP is 9, games and UMD movies vary from .95 to .95, although PSP equipped with multimedia playing ability, most people would buy PSP as a console only. The price is a bit high for customers who mainly are low-income teenagers. Indeed, lowering price would definitely trigger problem recognition. For example, when the PSP approached into the market, consumers might not be ready to buy a PSP due to lack of purchasing power. If they see the PSP with a reasonable price, they might be interested to buy one. 2. Is price an important evaluative criterion? Is price likely to serve as a surrogate indicator of quality? Price probable is certainly an important evaluative criterion for consumers before purchasing a product. Firstly, before purchasing a new product, consumer had to consider their purchasing power. Every consumer has different purchasing power, such as different people have different income. Secondly, if the price is reasonable, people who are not interested in playing games may start to pay attention to PSP’s other functions; they may end up buying PSP as portable multimedia player. Therefore, price can influence consumer to make a decision on buying things thus it is an important evaluative criterion. In this case, price is likely to serve as a surrogate indicator of quality. The PSP is made by most advanced technologies and hi–tech electronic materials which normally cost higher price, in another word, the cost would be low if the parts are outdated and low-end. Therefore, most of electronic product equipped with outstanding performance cost higher than the rest in the market. Regards to PSP, the price can be seen as a surrogate indicator of quality. 3. Are consumer likely to respond to in-store price reductions? Consumers are likely to respond to in-store price reductions, for the reason that will increase the customer purchase motivation, as well as the price is the most important evaluative criterion. The customers always walk into store to browse or check the information of products. When they saw the price is reduced, sometimes they will purchase the items immediately. 5. Distribution strategy (D. Decision-process factors) 1. What outlets are in the segment’s evoked set (the set of alternatives that will be considered for the solution of a particular problem)? Will consumers in this segment seek information in this type of outlet? There are 13 outlets when customers seek for purchasing: • EB Games • GameRush • MYER • Harvey Norman • Dick Smith • JB Hi-Fi • Target • Big W • K-Mart • DoDo Shop • Duty Free Shop • Sony Shop • E-Shop According to research the Dick Smith sells PSP at 394 dollars and 350 dollars member price in sells a kind of PSP package; included one PSP console and one game for 0. Most customers will not seek information in this type of store because PSP already publish and put in circulation in America, Japan, and some Asian countries. The most of them already got the information from internet or magazines. Nevertheless, there are some players will still seek information from the outlets, such as price. 2. Which evaluate criteria does this segment use to evaluate outlets? These evaluative criteria can be used to evaluate outlets: The evoked set for buying a PSP: 1. EB Games 2. GameRush 3. Sony Shop • Price – price is the most important criteria that will influence customer to buy the product. • Location – people would always look for product in the closest outlet. • Promotions – special offers will always attract customers such as Downtown Duty Free shops promote the special PSP package. • Refund policy – such as Myer have the good refund policy, if customer not satisfied the performance of products, they can bring the receipt and product to return and get totally refund within 14 days. • Warranty – warranty is very important for the new technology product, if the machinery is broken down the warranty will free repair within the period of guarantee • Option of Game – due to PSP just new arriver, some stores don’t have too many choices of the games • Staff – staff’s knowledge of PSP is important for customer to seek information and also staff’s attitude in attending to customers • Financing – customer can to have possession of PSP immediate just to pay small amount of deposit 3. Is the outlet selected before, after or simultaneously with the product/ brand? To what extent are product decisions made in the retail outlet? In this case, for purchasing a PSP, consumers often select outlet after the product or brand. As we mentioned before, PSP had been released earlier in other countries. Most of the players have already made a decision to buy a PSP before it approach into Australian market and they put the deposit in pre-order list from different outlets. The outlets for PSP player is not really important, cause the most important is to get the PSP. 6. Promotion Strategy (D. Decision-process influences) 1. Will problem recognition occur naturally or must it be activated by advertising? Should generic or selective problem recognition be generated? There are two kinds of situations, for the loyal customers or people interested in new technology or novel staff the problem recognition occurs naturally. They would keep seeking latest information and always be aware of new stuff. But for most of non-players who are not always tend to master all this sort of information, problem recognition must be activated by advertising then, such as parents choose their kid’s birthday presents, they may started thinking of buying after browse an ad. Generic problem recognition refers to the recognition of a discrepancy that a variety of brands within a product category can reduce. Selective problem recognition refers to the recognition of a discrepancy that only one brand in the product category can solve. (Neal, Cathy M. 2002) In this PSP case the generic problem recognition was generated, for the reason that PSP is not the very only product when people goes after a portable console or a portable multimedia player, there are many other brands can be found as NDS and GBA or PDA and palm. 2. Will the segment seek out or attend to product information prior to problem recognition, or must its members be reached when they are seeking the information? Can low-involvement learning processes be used effectively? What information sources are used? In this case, there are two groups of potential customers. One group is PSP players who are interested in video games or trendy stuff. These customers will seek out or attend to product information prior to problem recognition. And others would attend to stores or official webpage and brochures for getting information. It is believed that low-involvement learning processes be used effectively. Lowinvolvement products which are bought frequently and with a minimum of thought and effort because they are not of vital concern nor have any great impact on the consumer’s lifestyle. Advertising can persuade the customer, especially where low-involvement products are concerned. There are few information sources are normally used, Internet, magazine, newspaper and Internet. 3. After problem recognition, will the segment seek out information on the product/brand, or will we need to intervene in the purchase-decision process? If they do seek information, what sources are used? In Australia, segment will definitely seek out information on the product. Due to the release of Australian version is half a year after launch in Asia and North America. Setting information and users’ feedback from those areas can be viewed from internet and presswork. They are helpful for customers to get an in-depth introduction. But at the same time, after problem recognition, customers will go to different stores and enquire for detailed price and promotions, so they can get the best deal. Therefore, dealers don’t have to intervene the purchase-decision process, but they would influence customers’ directions. When customers seek information themselves, they may use internet, game magazine or information from friends. 4. What types of information are used to make a decision? There are 7 types of information to make a decision, and this sticks to the marketing theories: 1. Product 2. Place 3. Promotion 4. People 5. Physical evidence 6. Process 7. Price 5. How much, and what types of, information is acquired at the point of purchase? The PSP has just approach Australia’s market, the price is 9.95. Moreover, normally game magazine cost around to , internet and BBS fees cost no more than , virtual mail is for free. 6. Is post-purchase dissonance likely? Can it be reduced through the promotional campaign? Yes. According to text book that post-purchase dissonance means doubt or anxiety about the correctness of one’s decision after a purchase has been made. Yes, it can be reduced through the promotional campaign. However, the after service and refund policy must be very straight-forward and comprehensive, for instance if consumers are dissatisfied with the performance of PSP, whether it can be refund or the after service can be charged in reasonable price. There are also a special pack for sale such as buy one PSP plus 2 games for 9. 7. Has sufficient information been given to ensure proper product use? According to research, since the release of PSP in Asia and North America, Sony started throwing several promotional campaigns in Australia for preparing the official launch of Australian version (Area 4), billboard mostly. The content describes an obvious PSP logo trailed by a series of well-regulated notes, game controllers, and film frames, and they all go into the pocket located on the back of a girl’s jeans. This billboard graphically describes the major functions that PSP equipped. On the other hand, virtual ad-mails were sent to Sony Playstation members in OZ and Playstation world-wide official homepage present a detailed description of PSP’s features and introduced the best way to maintain the PSP for achieving best performance and usage life. Moreover, there are different kinds of presswork in those outlets sell PSP. The presswork gives potential customers a general idea of PSP’s performance and functions. So, apart from any unexpected quality problems occurring, Sony has provided sufficient information which ensures the proper use of the product. 8. Are the expectations generated by the promotional campaign consistent with the product’s performance? PSP’s Australian version (area 4) was released on 1st Sep 2005. According to observation; there are large crowd of pre-ordered people waiting for the launch in front of every game outlet around 00:00am, local TV channels reported such situation. It proves that Australian players were possessed with high expectations. Since then, regards to interview with outlet staff and press released on Sony official webpage, the sales of PSP kept increasing, it is no doubt that PSP’s outstanding hardware and software have attracted more and more people and satisfy them. It is to be believed that PSP will take over considerable amount of market in a short period of time. 9. Are the messages designed to encourage repeat purchases, brand loyal purchase, or neither? From those messages delivered to customers in Australia, there are not any signs or metaphors indicating encouragement of repeat purchases. One thing is to be considered, PSP in white color has just been released in Asia, so it may land in Australia sooner or later. It may affect people who are console collectors, but there are not any promotions about white PSP until today, and spend 9 just for a color change might not be accepted by most of players. Besides, Sony didn’t monopolize the issuance of accessories, so speakers screen protectors developed by Logitech, and PSP bag made by Porter are all available in the market, and Sony didn’t force customers to purchase PSP and accessories from Sony shop only. In this case, Sony doesn’t anxious to establish customers’ brand loyalty towards PSP, but as complement goods to PSP, games and UMD movies will help PSP to take over the console market for sure. 7. Product (D Decision-process influences) D.1. Does the product/brand perform better than the alternatives on the key set of evaluative criteria used by this segment? PSP = Sony’s Playstation Portable NDS = Nintendo’s Dream Swan GBA = Nintendo’s Game Boy Advance (Ratings varies from 1~3, 1 = worst, 3 = best) According to the statistics, PSP successes in most evaluative criteria when compare with NDS and GBA (won 8 out of 12). Evaluative criteria PSP NDS GBA Price 1 3 2 Battery consumption 1 3 2 Memory space 3 1 2 Games 1 3 2 User interface friendly 3 3 2 Screen (size & resolution) 3 2 2 Multiplayer allowance 3 1 1 Compatibility 3 1 2 Accessory 3 1 2 Life 3 2 3 Warranty 3 2 3 Loading time 1 3 2 8. References • Neal, Quester and Hawkins, 2002, Consumer Behavior: Implications for Marketing Strategy, 3/e McGraw-Hill. • • •
www.kutoo.com.au. In addition the Downtown Duty Free Shop
www.au.playstation.com
www.kutoo.com.au
www.yourpsp.com.au
Credit:ivythesis.typepad.com
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