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Consumer Behaviour Assignment

Buyer and Consumer Behaviour (University of South Australia)

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Consumer Behaviour
Assignment
Prepared by Anthony Donato
110232141

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Consumer Behaviour (MARK1008) Assignment SP5 2018

Congratulations! You have recently been appointed as Marketing Coordinator at
the Colgate-Palmolive Company. Colgate-Palmolive is a global company serving
hundreds of millions of consumers worldwide, with some of the world’s most
recognisable brands. It provides products to markets globally in the Oral,
Personal, Home and Pet Care categories. Your role is within the toothpaste
product category, specifically assisting the Marketing Manager with the Colgate
brand toothpaste.

Your Marketing Manager is also new to her role and has commissioned some
market research to collect data on people’s toothpaste buying behaviour within
Australia. As you are a recent Marketing graduate from UniSA, she asks you to
analyse and interpret the data and share your insights on toothpaste buying
behaviour with the rest of the team in the marketing department.

You have been given a list of specific questions that the Marketing Manager
wants answered. You are required to prepare a 2000-word report that addresses
the questions outlined below.

She has also asked you to provide an Executive Summary (approximately 1 page
max.) outlining the major findings of the report and the implications for the
brand Colgate. This will be followed by the main body of the report divided into
the three sections:

 Brand Performance
 Mental Availability
 Demographics and Segmentation

This should be followed by a reference list. Your work should make reference to
material taught in this course via your readings and other sourced materials. You
should include at least 10 references as a minimum requirement. You do not
have to include the tables from this document.

Note: The word count excludes the executive summary, all tables and your
reference list. Headings and sub-headings in the report are encouraged where
th
appropriate. This assessment needs to be submitted no later than Monday 8
October by 11.00pm (at which time the submission link closes). It is important that
this deadline is adhered to.

This course has a strict no extensions policy unless exceptional circumstances

apply (for more information please refer to the Course Outline). Extensions will
not be granted for this work on or after the due date. All extension requests need
to be submitted in writing via the ‘Extensions’ link on the course website.

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Executive Summary
This report will serve to analyse and interpret the market research recently collected for
Colgate, and give insight for future marketing campaigns, and advice for current marketing
activities. The data given includes brand performance measures (as found in Table 1),
duplication of purchases across brands in the toothpaste category (as found in Table 2), and
differences in sales throughout the category across various demographics (as found in Table
3-5).

Firstly, this report will examine the brand performance of Colgate, taking factors such as
market share, penetration, average purchase frequency, category buying rate, share of
category requirements and sole loyalty into account. The duplication of purchase in the
toothpaste category will be also be examined in respect to Colgate, finding how much of
Colgate’s customers are also purchasing other brands, as well as other patterns that emerge
in the data.

Secondly, the importance of mental availability compared to brand attitudes within the
category will be discussed. This is a topic that will be of vital importance for the continued
growth of Colgate, helping existing customers to grow strong mental links with the brand
when in purchasing situations, as well as growing these links in new customer’s minds so
that they are more likely to purchase Colgate.

Finally, the influence of demographics and segmentation will be looked at in respect to

Colgate’s existing sales percentages, as well as it’s future marketing plans. The
demographics that will be examined include age, gender and total household income, and
these will be analysed throughout all the brands in the category, as well as for Colgate in
particular. Further to this, the segmentation of the brand will then be developed, due to the
results found in the demographic analysis. This report includes a full reference list, making
note of numerous sources to support the finding.

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Section 1: Brand Performance

1. Are there any patterns evident between the brand performance

measures in Table 1? Describe the patterns and differences that you
see between the competing brands, and specifically for Colgate.
(350 words approx.)

Table 1: Brand Performance Measures

By examining table 1, it can be seen that Colgate is the biggest brand as it has
the highest market share, penetration and purchase frequency (Anschuetz,
1997). It can also be seen that as brand size decreases, market share,
penetration and purchase frequency decrease also. This is consistent with the
law of double jeopardy, which states that bigger brands have more buyers that
buy slightly more often and vice versa (Goodhardt, Uncles and Ehrenberg, 2004).
The share of category requirements reflects this trend also, with the share of a
customer’s purchases of a brand compared to their purchases from their
category decreasing as the brands become smaller.

When examining the category buying rate, it can be seen that the smaller the
brand, the higher the category buying rate. This is consistent with the
duplication of purchase law, which states that the amount that customers share
their loyalty across brands depends on the size of the brand being examined
(Kennedy and McColl, 2012).

In the case of Sensodyne it is clearly the smallest brand with the lowest market
share, penetration and purchase frequency, but it has the highest category
buying rate. This is because customers are more likely to buy other brands as
well as Sensodyne, as other brands are bigger and have a higher chance of being
purchased. The same is true in reverse for Colgate, as they are the biggest
brand. Therefore, their category buying rate is the lowest, as less customers are
likely to buy other brands alongside Colgate, as all other brands are smaller.

By the same token, sole loyalty to brands can be examined. Colgate, being the
largest brand, has the highest amount of sole loyals, and vice versa for
Sensodyne. The low amount of sole loyals across all brands is normal, as
customers that are 100% loyal to any one brand are unusual. (Wright, Sharp and
Goodhardt, 2002)

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2. Your Marketing Manager is interested to know who are Colgate’s

main competitors. Analyse Table 2. Describe the Duplication of
Purchase Law. Also, identify and explain any deviations from the
expected pattern. What are some possible reasons for deviations? What
are the two main implications from the Duplication of Purchase Law
table for any marketing manager?
(350 words approx.)

Table 2: Duplication of Purchase

As stated previously, the duplication of purchase law refers to brands sharing a certain
proportion of customers with each other depending on their market share. It is observed by a
pattern of larger brands sharing customers with smaller brands occasionally, and smaller
brands always sharing customers with bigger brands.

This can be seen in table 2, with Colgate topping the table as the biggest brand, and all
other brands sharing a high proportion of their customer base with them. The average
duplication is moving in line with brand size. The biggest competitors to Colgate are
Macleans and Oral B, as 75% of Colgate customers also bought Macleans, and 62% of
Colgate customers also bought Oral B. Aim and Sensodyne are relatively small brands, and
therefore have comparatively low brand sharing with Colgate.

It can be seen that a comparatively high percentage of Colgate customers also share
customers with Macleans (75%), compared to Macleans’ average duplication (68%).
Interestingly, the same trend can be observed in reverse, with a high percentage of
Macleans’ customers sharing customers with Colgate (77%) compared to Colgate’s average
duplication of (71%). Therefore, there is a partition between Colgate and Macleans, meaning
that the two brands have an abnormal amount of brand sharing between each other.

Other deviations found in the table include a high percentage of Aim customers sharing with
Oral B (67%) compared to Oral B’s average duplication of 62% and vice versa, and a low
percentage of Colgate customers sharing with Sensodyne (27%) compared to Sensodyne’s
average duplication of 32% and vice versa. Therefore, it can be said that there are also
partitions between Aim and Oral B, as well as between Colgate and Sensodyne.

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These deviations can occur for different reasons depending on if the deviation is positive or
negative. In the case of the heavy sharing between Colgate and Macleans, this would be
because the brands are the 2 biggest brands in the category, and customers are more likely
to switch between them due to their similarity in functional attributes. In the case of
Sensodyne and Colgate, this usually occurs due to different distribution avenues. It is likely
that Colgate is offered in many places that Sensodyne is not, affecting their brand sharing.

An implication of the duplication of purchase law for marketing managers is that all brands
generally compete in a single-segmented mass market (Kenedy and Ehrenberg, 2001). This
means that brands compete directly depending on their size, and therefore to grow a brand,
it’s penetration must increase.

3. Your Marketing Manager believes that Colgate’s success as the

largest brand in toothpaste product category is due to Colgate having
many heavy buyers in its customer base. This is just her opinion and
she has never looked into the data to see if this is correct. As a result of
this opinion, your Marketing Manager wants to implement a marketing
strategy focusing on the brand’s heavy buyers, as she believes that
these buyers are more important to the brand. Explain if this is a good
strategy to take? Why/ Why not? (300 words approx.)

This is not a good strategy, as usually only about 20% of a brand’s customer base are heavy
buyers, with the other 80% being light buyers. When considering marketing strategy, it isn’t a
matter of sales that determines which group is more important to a brand, but rather how a
group encourages brand growth.

As previously established, a brand’s success is due to it’s size, and therefore increasing the
amount of light buyers will increase the Colgate’s penetration and therefore elongate and
further increase it’s status as the largest brand in toothpaste. If only heavy buyers were
targeted, the brand would not grow as well or as quickly, and if light buyers are not being
targeted their sales will fall away, which could cripple the brand in the long term. Therefore, it
can be seen that heavy buyers, while important to Colgate, are not as important as light
buyers when comparing long-term brand growth.

With that said, if it can be determined why heavy buyers buy heavily from the brand, they
can be targeted in particular. If this is applied in conjunction with targeting new/light buyers, it
can help total growth of the brand (East et al., 2017).

Section 2: Mental Availability

4. Your Marketing Manager believes that it is more important to

measure attitudes and not mental availability. Define attitude and
compare the concept with mental availability. Which is more
important to measure? Explain your answer.
(200 words approx.)

Attitudes, in terms of brands, refer to a customer’s assessment of the brand.

Mental availability instead refers to the probability of a brand being thought of in
a buying situation. Sharp defines a buying situation (or a ‘choice situation’) as
follows:

“The moment when and place where a consumer makes a purchase decision."
(Sharp, 2012)

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It can be seen that attitude refers more to a customer’s feelings, whereas mental
availability refers to how much of a lasting impression a brand has made on a
customer, or how much they remember the brand. (Sharp, 2010).

When examining the two factors, mental availability is almost always more
important to measure, especially where brand growth is considered. As
previously established, brand growth refers to increasing brand penetration,
which is done by attracting new buyers. If a customer is not aware of the brand,
or does not remember the brand, then it cannot be thought of in a buying
situation, and therefore will not be purchased. In this way, the customer’s
attitude toward a brand and it’s attributes doesn’t matter if they don’t remember
the brand in the first place.

5. Discuss how mental availability can be built and enhanced? What

are the appropriate marketing strategies for building mental
availability? Name 10 category entry points that you would expect
to be included into an advertisement for the Colgate brand. (300
words approx.)

Mental availability is built and enhanced in various ways, but they all point to
one common denominator, and that is the amount of category entry points that
a customer links the brand too. A category entry point refers to the various
‘cues’ that customers use to retrieve the brand from their memory. The more
category entry points a brand can imprint in a customer’s mind, the more likely it
is to be thought of in a buying situation. If a customer does not know a brand in a
buying situation, they are unlikely to purchase it and vice versa – if a customer is
familiar with a brand they are more likely to purchase it. (Romaniuk and Sharp,
2016)

Furthermore, by making sure these category entry points are strong and not
easily forgotten, the brand will be even more likely to be purchased, further
increasing brand growth. This is done by linking the brand to these category
entry points in the customer’s mind using advertising and various marketing
strategies, whether that be TV advertisements, print media, or other avenues.

For some examples, below are 10 possible category entry points that would be
expected to be found in a Colgate advertisement.

- Teeth care
- Bathrooms
- Personal hygiene
- Morning routine
- Evening routine
- Bad breath
- Going to the dentist
- Shopping for bathroom products
- Flossing
- Personal appearance (‘white’ teeth)

Section 3: Demographics & Segmentation

6. Your Marketing Manager believes that the customer profile of Colgate is

different to the customer profiles of any of the other brands. Using the data in

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Tables 3-5, comment on whether this is the case? Explain your answer.
(300 words approx.)

When examining brand customer profiles, it is a widely observed generalisation

that they rarely differ (Uncles, 2012). The data found in tables 3-5 reflect this
notion, which is found by observing the deviations between the average percent
of various demographics that purchased from the category and the observed
amount that purchased Colgate. The Mean Absolute Deviation (or MAD) help
clearly define this.

It can be seen in Table 3 that the average percentage of males that buy
toothpaste within the category is 40%, and the average amount of females is
60%. Colgate’s observed values were that 64% of females purchased their
brand, and 36% of males also purchased it. This indicates a mean absolute
deviation of 4 for males and females, which is does not hugely differ from the
average percentage. Therefore, between genders it can be seen that there is
very little difference between Colgate’s gender demographic and the gender
demographic of the category.

If Table 4 is examined, it can be seen that the average mean absolute deviation
for Colgate was only 3. Therefore, between age groups it can be seen that there
is very little difference between their age demographic and the age demographic
of the category.

If Table 5 is examined, it can be seen that the average mean absolute deviation
or Colgate is slightly higher, at 6. However, this is still relatively low, and it is still
fair to say that there is very little difference between the total household income
of Colgate’s buyers and the total household income of the category buyers.

Therefore, it can be said that overall, Colgate’s brand user profiles do not differ
from those throughout the average market.

Table 3: Demographics – Gender

Table 4: Demographics – Age

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Table 5: Demographics – Total household income

7. What marketing strategy recommendations would you make to your Marketing

Manager as a result of your demographic and segmentation analysis in Q6. (200
words approx.)

In segmentation, traditionally a brand is segmented either by brand users, by

stock-keeping units or by category. However, it can be seen that the brand user
profiles of toothpaste purchasers do not differ greatly, and that the functional
attributes of each brand’s stock-keeping units are relatively similar. Therefore,
for toothpaste (and for the wide majority of goods), the only segment to speak of
is within the entire category. (Kennedy and Ehrenberg, 2001)

Therefore, it would be beneficial for Colgate to consider the market as a single

unsegmented mass market, rather than in terms of age, gender, household
income, or any other factor or demographic. Customers do not appear to mind
which brand they purchase, as long as they are purchasing a reputable brand.
Their brand choice depends more on mental availability and the market share of
the brand, then the demographic of the customer, and this is what they should
be focusing on when implementing a marketing strategy. If this is done
sustainably and effectively, the brand will continue to experience growth and an
uninterrupted presence at the top of the market.

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Word Count: 1818

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References
Anschuetz, N. (1997). Profiting from the 80-20 rule of thumb. Journal of advertising
research., 37(6).

East, R., Singh, J., Wright, M. and Vanhuele, M. (2017). Consumer Behaviour: applications
in marketing. 3rd ed. SAGE Publications, p.5.

Goodhardt, G., Uncles, M. and Ehrenberg, A. (2004). Understanding brand performance

measures: using Dirichlet benchmarks :. Journal of Business Research, 57(12).

Kenedy, R. and Ehrenberg, A. (2001). There is no brand segmentation. Marketing Research,

13(1), pp.4-7.

Kennedy, R. and McColl, B. (2012). Brand growth at Mars, Inc. Journal of advertising
research, 52(2).

Romaniuk, J. and Sharp, B. (2016). How Brands Grow: Part 2. South Melbourne: Oxford
University Press, p.64.

Sharp, B. (2012). Marketing : Theory, Evidence, Practice. 1st ed. Oxford University Press,
p.41, 47.

Sharp, B. (2010). How Brands Grow: What Marketers Don't Know. South Melbourne: Oxford
University Press, p.180.

Uncles, M. (2012). In 25 years, across 50 categories, user profiles for directly competing
brands seldom differ :. Journal of Advertising Research, 52(2).

Wright, M., Sharp, B. and Goodhardt, G. (2002). Purchase loyalty is polarised into either
repertoire or subscription patterns :. Australasian Marketing Journal, 10(3), p.8.

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