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AMB200 Consumer Behaviour Report

Consumer Behaviour (Queensland University of Technology)

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AMB200 Consumer
Behaviour

Assessment 3: CB Report
Word Count: 2315

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I. Context and problem/opportunity:

The Australian Competition and Consumer Council introduced a national unit pricing scheme
in the year of 2009, in which it was intended to assist consumers by helping them make
better and more informed purchase decisions in grocery stores with the use of standardised
price information across products. With a reported 80% of Australian consumers claiming to
use unit pricing for grocery purchases in CHOICE and Ian Jarrat’s 2011 study, it appears ‘on
paper’ that ACCC’s implementation of unit pricing has been overwhelmingly successful.
However, many authors conversely suggest that the true, realistic usage rate of unit pricing
could well be far less that that recorded by Jarrat’s 2011 study. Authors like Mitchell,
Lennard, & McGoldrick [CITATION Vin \n \t \l 3081 ] provide a range of reasons, stretching
from British consumer’s feelings that unit pricing is too complicated and takes too much
time, to consumers using other strategies for their purchase decisions.

This report aims to find an appropriate settlement between consumer education and
provision of information in the form of unit pricing without the infringement of the basic 4
P’s of marketing: product, place of selling, promotion or price while also acknowledging
corporate interests at heart. With the ultimate goal of changing attitudes about unit pricing.

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II. Literature Review

The Australian Competition and Consumer Council’s legislation of unit pricing was
introduced only eight years ago. To provide context, essentially the entire western world
(that is North America, European Union and Great Britain) had well and truly started
implementing unit pricing by the mid 70’s. While unit pricing has been around for over
forty years in some of these western countries, the format, according to Miyazaki and
Sprott [CITATION Ant00 \n \t \l 3081 ], in which this information is being presented has
been largely ignored. Unit pricing was introduced in the 1970s, as a protection
mechanism for the consumer and to improve the consumer’s efficiency in making an
informed purchase decision[ CITATION Pad71 \l 3081 ]. However, authors challenge the
continued effectiveness of unit pricing, such as in Bialkova & Grunert’s [CITATION Bia13 \n
\t \l 3081 ] text ‘Standing out in the Crowd The Effect of Information Clutter on Consumer
Attention for Front of Pack Nutrition Labels’ as more ‘clutter’ has taken place since the
70’s, to name only a few, consumers have the opportunity to evaluate product
alternatives based on the brand, the packaging design, the product’s country of origin,
nutrition facts listed on a packaging, the package size, as well as the product price.
It could well increase the likelihood of consumers paying less attention and not even
noticing unit price. This is substantiated by research by Mitchell, Lennard, & McGoldrick
[CITATION Vin \n \t \l 3081 ] in which research revealed that the numbers (in the UK)

noticing unit price labels on shelf edges had increased only from 51.5% in 1995 to 58% in
2002, with only 34.1 percent of those consumers actually applying unit price to their
purchase decisions. Combined with this, the recent report conducted by consumer
advocate group CHOICE and Ian Jarret from Queensland Consumer Association [CITATION
Ian11 \n \t \l 3081 ] showed that 15% of all respondents know about unit prices but were
not using them. This presents a seemingly invariable issue amongst unit price related
research, which is, why is it then, that a large proportion of consumers clearly aware of
unit pricing ignore this valuable information in their purchase decisions?

Consumers largely overestimate, Himbert [CITATION Len15 \n \t \l 3081 ] explains, how

much they use the unit price information when making grocery choices. This also
explains remarkably high results from the CHOICE [ CITATION Ian11 \l 3081 ] unit price

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study which came to the resolution that 80% of its respondents claim to actively use unit
prices. With an activity as mundane as grocery shopping, this result is likely because of
consumer’s generally poor ability to notice and recall their own behaviour [ CITATION
Len15 \l 3081 ].

As to why exactly consumers decide against the use of unit price, surrounding academic
literature point to several key reasons.
Brand loyalty is a consumer behaviour which can be accredited to the reduction of usage
of unit price, as it encourages impulsiveness and automation of purchase decisions,
furthermore consumer perceptions of brand image and quality play a part in this
decision process, as the decision turns to being quality based rather than that of
value/quantity based [ CITATION Cat07 \l 3081 ].
Surprisingly, unit pricing isn’t even viewed as the best way to achieve savings, with
Bogomolova & Louviere [CITATION Bog12 \n \t \l 3081 ] finding through respondents that
comparing unit prices of competing brands was only the second most commonly
mentioned method to get the best value for money in grocery shopping. The study
revealed that the most common method cited was to ‘buy on special’.
Layout of unit pricing, in particular font size, signposting, colour coding and position are
factors proven in Oppewal, Cohen, & Yao’s analysis in which unit price usage can be
affected by. Applying the usage of eye movements and choices made by participants in a
controlled lab environment, the increased prominence of unit price labelling improved
usage rates by up to 58%.

The benefits that unit pricing can provide to the Australian consumer is invaluable. With
it’s ability to ease standard of living and disposable income to those especially
vulnerable, like low income Australians. This is seen in Weeks’ [CITATION Wee16 \n \t \l
3081 ] analysis of consumer saving when actively using unit pricing, which showed that

shoppers receiving consumer education displayed savings of 17-18% in the first six
weeks.
Furthermore, unit price adoption reduces time and money spent in supermarkets, as
time in supermarkets and money being expended have a direct correlation, as research
has shown that more than 50% of supermarket purchases are unintended [ CITATION
Opp15 \l 3081 ].

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Evidently, the literature has shown that to a large extent active consumer education,
increased prominence of labelling and emphasis on value for money over brand
perception increase usage rates of unit price in grocery stores and supermarkets.

III. Theory/Model/Framework

Attitude formation and change is a particularly viable theory to apply with the context of
consumer relationships with unit price. The two functions which apply to unit pricing and
grocery shopping are: The knowledge functions of attitude, which explains how the attitudes
to avoiding unit pricing among grocery shoppers serve as mental shortcuts to save time or in
ambiguous situations when they are faced with a number of alternatives, and to a lesser
extent, the ego-defensive function of attitude, where it is concerned with the attitudes that
are formed to protect the individual consumer’s internal feelings to perform an ego
defensive function. For example, research has shown that some consumers rather buy
certain products over greater value alternative labels in grocery goods purely because of
ego defensive motivations by rationalising their emotive purchases that the brand
represents them better, this was seen with consumers buying olive oil exclusively from Italy
over Australian because they wanted be seen (or feel) more continental [ CITATION Smi08 \l
3081 ]. These, theories are obviously against the very nature of which unit pricing was
introduced, which is to provide consumers with better information to make more informed
choices on value.

An attitude is made up of two components, the way a consumer feels about an object is
called the emotion component, while the cognition component comprises the beliefs in
which the consumers holds about an object. These play an integral part in further helping to
understand consumer behaviour when faced with unit pricing, as this emphasis the
connection between knowing and feeling, much like how consumers know about unit price
and its characteristics, but don’t feel like using it. According to Petty & Cacioppo [CITATION
Pet81 \n \t \l 3081 ], consumers attitudes toward a product a product cannot be determined

by simply identifying their beliefs about it. For example, consumers know that unit pricining
can lead to savings but such findings do not indicate whether they feel the attributes are

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good, bad, irrelevant or whether they would actually be bothered to use it.
Along with the two functions of attitude, ego-defensive function and knowledge function,
the hierachy of effects is a model involved with attitude formed by Lavide and Steiner
(1961). Seen in Appendices 1, the heirarchy of effects model has grocery shopping in the low
involvement hierachy, as grocery shopping for the average consumer is labelled as a low
involvement process , as it is defined as regular and somewhat structured. Bogomolova &
Louviere [CITATION Bog12 \n \t \l 3081 ] expand in stating that the less important a product is
to the consumer, the more important are many of the marketing stimuli. Marketing stimuli
in relation to unit price, addresses factors like labelling (colour, font, prominence) and also
price related stimuli such as the use of odd prices which, argued by Murray and Raphel
(1993) is percieved as greater value than evenly priced products within conventional
shopping consumers.

IV. Recommendations

In the perspective of a marketer consulting to the ACCC, this section will recommend several
ways to address the problem and to reach the outlined goals for this analysis, which is to
improve attitude towards unit price usage. In order to effectively change attitudes of
consumers, it has been outlined that the combination of promotion and product of the
elements of the 4p’s of the product marketing mix will be successful in reaching this goal.

To influence consumers to the extent that they will change their attitude towards unit
pricing positively requires a thought provoking and fact driven promotion/advertising
campaign. This is because of the hierarchical attitude type of the low involvement category,
of which the cognitive aspect is the most influential component in the particular model
according to Lavide and Steiner’s (1961) hierarchy of needs model. The campaign therefore
must target the cognitive element of attitude formation and change, that is, the beliefs a
consumer holds about an object. This approach would be best used with the addition of
physical evidence, such as Week’s [CITATION Wee16 \n \t \l 3081 ] findings that users of unit
pricing saved 17-18% on their grocery shopping. By further emphasising the benefits of unit

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pricing in the promotive campaign and targeting the cognitive component of attitude in
consumers, the target market will subsequently change their attitudes about it, as the
personal benefits of consumption becomes decoded through the communication process
and successfully realigns their attitudes positively towards unit price usage. The target
market for the campaign broadly speaking would be essentially anyone ‘seeking value’, but
young families with desire to save where they can do is a segment ideal for further targeting
in the market, as they both regularly shop for groceries due to a bigger household, and pay
more for than for example a market segment like students. While still being a promotional
tool, the campaign to a larger extent serves more as a consumer re-education tool, as most
Australian consumers, 80% in fact [ CITATION Ian11 \l 3081 ], claim to use unit pricing often
when in reality this number is largely overestimated due to negative consumer attitude
[ CITATION Len15 \l 3081 ].

This is why the application of attitude theory and models to the campaign works so
coherently, because it has such a large scope to create legitimate change for the Australian
consumer’s benefit.

The use of ‘out-of-home’ advertising such as billboards, transport/transit advertising (bus

stops and busses etc.) would be an effective media channel to target those consumers most
likely to retain the message of the advertisement in their thoughts while they go to the
grocery store/supermarket and are vulnerable to using unit pricing if correctly reminded and
informed. This is an appropriate assumption as, for example, it is those consumers who
would be coming home work on public transport and notice the advertising before they go
and grab dinner for the family, or those consumers driving to the supermarket and passing a
billboard on the way which is relative to their personal buying situation.

As outlined earlier in the report, one noted cause of low unit price usage and negative
consumer attitudes towards unit price usage has been proven to be a product related
marketing problem of the 4 p’s of marketing mix. That is, the product severely lacks to draw
enough consumer attention to a large enough extent for them to decide to use it. In a study
done by Sprott & Miyazaki [CITATION Ant00 \n \t \l 3081 ]consumers exposed to unit price in
a simulated grocery shopping experience reported not even noticing it. Notably, in another

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research study, Oppewal, Cohen, & Yao [CITATION Opp15 \n \t \l 3081 ] found a 58% increase
in usage rates of unit prices when signposting, colour coding and position was noticeably
enhanced. While this study has its flaws, in that it was completely conducted in a controlled
lab environment, it still indicates of a strong change in consumer attitude.
This raises the opportunity to address the question surrounding unit pricing, by increasing
prominence of the elements of unit price labelling, this composes of colour, font, font size
and position with the motivation of better competing with the main selling price for the
product which is essentially in this context the unit price’s primary competition.

Below, a proposed redesign of supermarket price labels is featured.

This design enhances the size and text of the unit price with a large font size and in all
capitals, grabs consumers attention, while the red highlighting, and decreased size of the
physical selling price drastically improves visibility and prominence of the unit price. This is
an effective concept because it emphasis the value of unit price for consumer grocery
goods/products and changes cognitive attitude of the consumer’s position on unit pricing
positively.

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Based off of attitude formation models and theories, and the industry and academic
research and literature related to the topic, it can be confidently said as an (acting)
marketing consultant that the adoption of a promotion campaign based on the re-education
for consumers, and a product overhaul centred on increasing prominence and visibility
would actively achieve a positive change in consumer attitudes towards unit price usage and
would reflect in higher market usage of the ACCC’s innovation of which was introduced in
2009. Therefore, changing consumer behaviours for their monetary benefit and for the
reasons in which this system was introduced for.

References
Bialkova, S., & Grunert, G. (2013). Food Policy. Standing out in the Crowd The
Effect of Information Clutter on Consumer Attention for Front of Pack
Nutrition Labels.
Bogomolova, S., & Louviere, J. (2012). Unit pricing is smart shopping practice,
but do consumers care? Sydney.
Cataluna, Garcia, & Phau. (2007). The influence of price and brand loyalty on
store brands versus national brands. International Review of Retail,
Distribution and Consumer Research.
Himbert, L. (2015). Unit Pricing: Empirical Investigations of its Influences at the
Product and Retailer Levels. Spring Gabler.
Jarret, I. (2011, November 27). Report of Survey on Grocery Unit Pricing.
Retrieved from Consumers Federation:
http://consumersfederation.org.au/wp-content/uploads/2011/12/UP_S
urvey_Report_-_FINAL1.pdf
Mitchell, V.-W., Lennard, D., & McGoldrick, P. (2003). Consumer Awareness,
Understanding and Usage of Unit Pricing. British Journal of
Management.
Oppewal, Cohen, & Yao. (2015, May). How the layout of a price label influences
unit price visual attention and choice during grocery shopping. Retrieved
from University of South Australia:
http://search.ror.unisa.edu.au/record/UNISA_ALMA1114288423000183

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1/media/digital/open/
9916021710601831/12142884220001831/13142967710001831/pdf
Padberg, D. (1977). Unit Pricing in Supermarkets: Alternatives, Costs and
Consumer Reactions, 1-22.
Petty, R., & Cacioppo, J. (1981). Attitudes and persuasion: classic and
contemporary approaches. Dubuque, IA.
Smith, J., Manstead, T. D., Kotterman, T. D., & Wolfs, J. (2008). The Attitude-
Behavior Relationship in Consumer Conduct: The Role of Norms, Past
Behavior, and Self-Identity. The Journal of Social Psychology.
Sprott, D., & Miyazaki, A. (2000). Unit prices on retail shelf labels: an
assessment of information prominence. Journal of Retailing.
Weeks, C. S. (2016). Understanding how consumer education impacts shoppers
over time: A longitudinal field study of Unit Price usage. Journal of
Retailing and Consumer Services.

APPENDIX:

10

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Appendices 1:

11

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