Factors Affecting Consumer Behavior
Engel et al (Warwick University: Market Analysis course note, 2001) defined consumer behavior as ¡¥those activities directly involved in obtaining, consuming and disposing of products and services, including the decision processes that precede and follow these actions¡¦. Hence, a successful marketer needs to analysis and understand the factors that influence the buying process in order to develop appropriate marketing strategies. The discussion first will analyze the factors that affecting consumer buying process in the disposable razor market, then will follow with what approaches adopted by Bic and Gillette in responding to these challenges.
Kotler et al (1999) identified four major groups of factors that would influence consumer behavior: cultural factors, social factors, personal factors and psychological factors.
Kotler et al (1999) defined culture as ¡¥the set of basic values, perceptions, wants and behaviors learned by a member of society from family and other important institutions¡¦. The culture of morning shaving ritual was once a serious business for most men and it influenced how they buy and use the products. Different social classes required different products signaling their group of ranking who shared similar values, interests and behaviors (Dibb et al, 2001 & Kotler et al 1999). Upper classes were usually status seeking and always bought classy products for high price. Lower classes usually bought cheap and private-label blades. However, culture changes over time and always challenged by sub-cultures who might come from different geographic regions or human characteristics, such as age or ethnic background (Dibb et al, 2001). The younger groups no longer view shaving is serious, rather they may treat shaving as private necessities (Kotler et al, 1999) like other clean-up activities such as shower. Also short of time is a major problem for most people nowadays. Therefore there is a cultural shift for men to use a razor with comparative advantages over the other brand ¡V that is convenience, function and price.
¡¥Social factors are the forces that other people exert on buying behavior¡¦ (Dibb et al, 2001) including groups and family. Primary groups such as family and close friendships are most likely the forces that influence the purchase decision of a disposable razor. The opinion leader of a group may influence a man to choose what brand of disposable razor by providing specific information such as his experience. Kotler et al (1999) argued that group influences do not much affect decisions about private necessities because other people do not notice the product or the brand. Hence the influence of opinion leader is most likely on new consumers as repeat consumers perceive that ¡¥one brand does as well as the next¡¦.
¡¥Personality is the internal traits and behaviors that make a person unique¡¦ (Dibb et al, 2001). Age is obviously an important personality characteristic to affect the product choice. ¡¥The first shave remains a rite of passage into manhood¡¦ would mean that the consumers put more effort in the buying process at that life cycle. Lifestyle also influences the buying process. For example, the traditionalist is not likely to accept disposable razor in an easy manner, while the rationalist love to take risk for new products. A personality with a high adaptability characteristic is also easy to use new products. Finally a man with self-concept that ¡¥his appearance is a matter of some importance regards his razor as important personal tool as a kind of extension of self¡¦.
Psychological factors include motivation, perception, attitudes and beliefs.
Motivation is the study about human needs and wants. McCarthy et al (1999) developed the ¡¥PSSP needs¡¦ model, which is similar to Maslow hierarchy of needs. The significant difference is that the PSSP needs model suggests a particular product may also satisfy more than one need simultaneously. In fact, most consumers try to fulfill a set of needs rather than just one need or another in sequence. The model is shown in Figure 2:
Applying the PSSP needs model, a disposable razor is a safety needs for physical well-being. It may be a social need of a man because he wants to be accepted by the others with a clean look. In a deeper extent, this may be a personal need also for self-esteem when he thinks his appearance is relatively importance than the others.
Perception is how consumers gather and interpret information from the world around them, including processes of selective exposure, selective perception and selective retention (McCarthy et al, 1999). When a man does not have a need for a disposable razor, he is selective exposure for paying attention to the razor advertisements but only seek for other information that interests him such as car advertisement. He is selective perception when he could not accept a cheap disposable razor that is conflict with his attitudes and beliefs so he screen out or modify information. Finally, he is selective retention when he remembers only what he wants to remember ¡V a disposable razor while he forgets totally the brand.
¡¥Attitude is a person¡¦s enduring point of view toward something¡¦ (McCarthy et al, 1999). A man likes Bic disposable razor because he had good consumption experience or dislike if he had bad experience. ¡¥Belief is a person¡¦s opinions about something¡¦ (McCarthy et al, 1999). A man is unlikely to switch to a disposable razor unless he believes it is more effective than the real razor he is using.
Bic was successful to understand the factors that affecting consumer buying process. They knew that there was a cultural shift and challenged the market by adopting differentiated positioning as to avoid head-to-head competition (Guiltinan et al, 1991). They identified their target segments to the group of consumers who would take risk to try new product ¡V the personal factor such as the younger group, rationalist lifestyle and adaptability personality. They designed their product with different determinant attributes that the consumers viewed as benefits ¡V low price, convenience and functional (disposable in addition to basic need). Consequently, they were able to reap of pioneering advantage (Guiltinan et al, 1991) by influencing judgments about which attributes are important in razor market.
On the other hand, Gillette was not sensitive to the factors that affecting consumer buying process. They spent a huge amount in R&D for product function but neglected the consumers¡¦ needs and wants. They neglected the cultural shift and insisted on the real razor, as they believed the disposable razor was used only for trips and in the changing rooms. They neglected the influence of social factor that primary groups and reference groups might affect the choice of product, especially if the opinion leader was an early adopter in the product life cycle (Guiltinan et al, 1991). They did not understand the impact of personal factor such as self-concept and was once introduced light/medium/heave beards version of razor. They identified their target segments to the group of traditional and neglected the larger segment of different lifestyles and personality. Facing hard attack from Bic, Gillette adopted defensive strategy by offering similar product to meet the competition.
Their marketing mixes are compared as following based on the limited information from the case.
Bic designed their razor with the benefits that appeal to their target segments. To an extreme, the disposable razor could be a substitution of real razor as it served the same basic need but were functional substitute (disposable) for real razor, which satisfied the safety and social needs of their consumers. The product idea was able to compatible with the values and experiences of their consumers. Their product showed that they were able to change the attitude and belief of the consumers from their repeat purchases.
Gillette offered basically the same benefits as Bic but tried to outdo Bic by using superior quality of blade on Good News! which were same as on Trac II and Atra. This had confused the consumers with the old products ¡V ¡¥why pay more for a twin-blade refill cartridge from Gillette when the same blade mounted on a plastic handle costs half as much¡¦ and affected the sales of Trac II and Atra products. Cost of the blade might be a key factor that they could not gain much profit from selling every single unit of Good News!.
Bic used penetration pricing to increase number of consumers and rate of purchase (Guiltanin et al, 1991). Low price could also help to reduce economic risk of trial and offer better value than competing product.
Gillette used parity pricing (Giltanin et al, 1991) to meet competition. This could be an effective effort to remove price as a consideration in making a choice by the consumers.
Bic understood the shopping pattern of their target segment and tried to reduce their time and convenience risk. They used maximum exposure with widespread and distribution in convenience place. Increasing number of purchase might mean that Bic could further reduce cost through experience curve effects (Guiltanin et al, 1991).
Gillette was most likely using the same strategy as Bic, which shown by their market share of 58 percent in disposable razor market.
Bic was successful in turning the psychological factor of the consumers to replace real razor with disposable razor. The promotion programs were addressed to their target segments on the basis of product benefits and attributes. They were effective in the integration of the buying process, adoption process and learning process into their promotion program as shown in Figure 3 (McCarthy et al, 1999). The adoption and learning process is important as they generated awareness of their product concept and changing consumers¡¦ attitudes to use disposable razor. They were able to overcome the negative perceptions and change the perception about the importance of product attributes. They also changed the beliefs about brand choice.
Gillette was most likely to use promotion programs as an extension of rear razor, that is, the disposable razor was ¡¥only used for trip and in the changing rooms when they had forgotten their real razor¡¦.
As a conclusion, it is important to analyze and understand the factors that affect the consumer buying process. Spending huge amount on R&D for product function without focusing on consumers¡¦ needs and wants may face with hard attack from other competitors who can provide products with comparative advantages. The analysis showed that Bic was successful in understanding those factors to develop appropriate strategies and marketing mix. On the other hand, Gillette was late in responding to the factors, which put them in a difficult position of hard competition and lost their advantages in the market.
Dibb, Sally; Simkin, Lyndon; Pride, William M and Ferrell, O C (2001), Marketing Concepts and Strategies, Fourth European Edition, Houghton Mifflin, Boston
Guiltinan, Joseph P and Paul, Gordon W (1991), Marketing Management: Strategies and Programs, International Edition, McGraw-Hill, U S A
Kotler, Philip; Armstrong, Gary; Saunders, John and Wong, Veronica (1999), Principles of Marketing, Second European Edition, Prentice Hall, New Jersey
McCarthy, E Jerome; Perreault, William D and Quester, Pascale G (1999), Basic Marketing: A Managerial Approach, 2nd Australasian Edition, McGraw-Hill, NSW
Warwick MBA: Market Analysis course notes (2001), University of Warwick, U K
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