STRATEGIC MARKETING MANAGEMENT

BUYER BEHAVIOUR AND RELATIONSHIP DEVELOPMENT

RESEARCH COMPANY TRIES TO SHOW THAT YOU CAN ONLY

UNDERSTAND CONSUMER BEHAVIOUR BY LIVING WITH THEIR
BEHAVIOUR

How can any marketer get inside your mind to understand how you actually
make purchase decisions? Structured questionnaire surveys may have a role
for collecting large scale factual data, but they have major weaknesses when
it comes to understanding individuals' attitudes. Qualitative approaches, such
as focus groups can get closer to the truth, but participants often still find
themselves inhibited from telling the full story. Many marketing managers,
especially those without large research budgets, inevitably end up relying on
their own personal experiences to understand how consumers behave. This
may be easy for target markets which are in the 20-40 age range (the age of
typical marketers), but how do you get inside the mind of teenagers, or elderly
people?

Ethnographic approaches are becoming increasingly popular among

marketers as a means of getting closer to the truth about consumer
behaviour. Ethnographic research is nothing new, having been used by
anthropologists in their study of the rituals of tribal people. Marketers have
been relatively recent converts to the techniques of ethnography. The
advertising agency BMP DDB has taken on board the techniques of
ethnography in its "Project Keyhole" in a manner which is reminiscent of
anthropologists' practice of living with tribes in order to understand them. Its
consumer researchers live with a family for several days in order to record
their every move. The project is designed to meet the needs of client
companies who are looking for more than the data gathered using traditional
quantitative and qualitative research techniques.

Participants record their views and actions on a digital video camera, in the
presence of a researcher who stays with them from 8am until 10pm for a few
days. A normal project would last four or five days and the client may be

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invited along for part of the time. Participants are paid £100 for their troubles.
What did they do with the direct mail when it came through the letter box? Did
they use the coupon offer which it contained? Who drinks the fresh orange
juice in the house? How long do they spend cooking dinner? How do they
actually cook the ready-prepared meals they bought earlier? Does the family
eat together? These are examples of the vital information that sponsoring
companies hope to get hold of in order to position their products more
effectively.

According to the company, the advantage of this method over conventional

research is that it picks up inconsistencies between what people say they do
and what they actually do. Following them throughout the day allows the
researcher to see why a person's habits might change according to random
factors such as their mood, the time of day or the weather. Crucially it reveals
the quirks in our behaviour that marketers are desperate to gain an insight
into. For example, a person's store-card data might tell you that they buy
bread and margarine, but it doesn't tell whether they eat the bread fresh, or
toast it first before putting margarine on it.

In 1998, the magazine Marketing put this novel research method to the test
with a guinea pig family called the Jones’s. It then compared the results of this
approach with more traditional methods of profiling customers. In short,
established systems such as CACI, Claritas and Experian might say one thing
about the buying behaviour of a family, using lifestyle and electoral roll data,
but did they bear any relation to reality?

The information that the researcher gathered in a short space of time told a lot
about the Jones family. By contrast, the database information about the
Joneses, although detailed and often accurate, could not capture the quirks
and details that make up the personality of the family. For example, it
transpired that the Joneses had a keener than average eye on value for
money. Although information on them from the four database companies
correctly suggested that they enjoy luxuries like good food and foreign
holidays, it didn't say anything about the real life factors that influence their

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purchasing decisions. The most noticeable of these was that although they
like good food, Mrs Jones mixed her shopping between the supermarket and
a local discount store which sells cut-price brands. This means that she only
bought at Tesco or Sainsbury's what she could not get cheaper elsewhere.
She showed the researcher a can of branded plum tomatoes which she got
for 10p at the discount store as an example, explaining that it would have cost
26p in the supermarket. Mrs Jones prided herself on being able to hunt down
bargains like this and occasionally rewarded herself by buying "something
luxurious", such as smoked salmon from Marks & Spencer. The freezer had
an important role to play as it allowed Mrs Jones to buy things she sees on
special offer even if she doesn't need them immediately.

Mrs Jones's eye for an offer made her a keen scrutiniser of direct mail. She
checked mailings for 'catches' in the small print and for any special offers.
She collected mailers worth chasing up on a clip on the fridge door, along with
vouchers collected from magazines. Mrs Jones’s financial nous means that
she managed the family's money.

Not surprisingly, these details did not come out in database information. Of
the commercial databases, CACI's People UK and Lifecycle UK databases
seemed to be most at variance with the reality of the Jones' life. They got their
ages wrong, incorrectly surmized that they took business flights and
incorrectly attributed Mr Jones with being computer literate. Nobody in the
household read the FT or the Independent as predicted - they read the Daily
Mail instead. Some of the other points made by CACI were right, but were felt
to be very generalized and could apply to anybody.

Claritas seemed to be much closer to reality. The Jones' predicted jobs were
about right and the database was correct in stating that they had credit and
store cards. They managed to say that the Joneses liked antiques, perhaps
learnt as a result of them occasionally buying Homes and Antiques magazine.
They similarly were correct in stating that they like gardening, DIY, foreign
travel and eating out. The database had predicted that the family would be

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most likely to own a Ford or Renault car. In fact, Mrs Jones owned a Ford,
while Mr Jones had a company Renault.

Based on "Keeping up with the Jones's”, Marketing, 19th November 1998, pp

28-29.

CASE STUDY REVIEW QUESTIONS

1. Why is it important to study the composition of the decision making unit? To

what extent do you think this research approach will give a complete
understanding of how family units make purchases?
2. What new possibilities, if any, for market segmentation are opened up by
this approach to the study of buyer behaviour?
3. Critically assess the scope for expanding this type of research as a means
of learning more about buyer behaviour.

1. Why is it important to study the composition of the decision making unit?

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Understanding the decision making unit of an organization is very important for

business marketers. This helps them prepare their sales executives to approach the
right people in an organization to make a sale.
A number of factors impact on the purchasing decisions of business buyers. The
business buyers are often influenced by organizational needs and their personal
motivations and perceptions. Understanding these factors will certainly help sales
managers design a perfect sales approach.
According to Kotler & Armstrong (2009) the business marketers are not likely to
know exactly what kind of group dynamics takes place during the decision process,
although whatever information they can collect about personalities and interpersonal
factors is very useful.  Therefore, it is very important for the marketers to identify and
understand the composition of the buying group. In fact, a framework to do that is the
decision making unit.
To what extent do you think this research approach will give a complete
understanding of how family units make purchases?
This research gives me understanding to explore the concept of the decision making
unit. Some insight about Social Comparisons, people tend to compare themselves to
other peoples. Our income and consumption levels are some of the most important
ways in which we evaluate ourselves relative to others. As discussed in study,
whether people consider themselves often depends on the condition of those around
them.

2. What new possibilities, if any, for market segmentation are opened

up by this approach to the study of buyer behaviour?
This study approach considers buyer behaviour, in why a consumer buys a product
than asking as to who is the consumer. Consumer response to the market offerings is
much more important which can be made as the bases for segmentation. Thus, Market
segmentation being the key input in firm’s marketing planning process; the crucial
issue is to how to identify these market segments. Marketing managers are expected
to examine a variety of segmentation criterion so as to identify those that will be most
effective in defining their markets. This study of demographic and socio-economic
segmentation tells approaches the firm as to who is the most likely customer to buy
the product or a service. Address all relevant geographic, demographic,

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psychographic, and behavioural variables and gives some insights about target
market.
The marketing segment strategy chosen is the key input to the marketing manager’s
most vital decisions. Thus, once the manager has the sound understanding of markets
to be approached, intelligent decisions about product, price promotion and place can
be made.
3. Critically assess the scope for expanding this type of research as a means of
learning more about buyer behaviour.

Unlike this study, the consumer behaviour that the consumers display in searching for,
purchasing, using, evaluating and disposing of products and services that they expect
will satisfy their needs. Consumer behaviours are influenced by various factors like
individual, environmental and decision making. And these factors may be helpful to
marketers in their marketing. Marketing is all about understanding consumer needs
and steering the customer toward product by creating certain wants in the minds of the
customer. To do these marketers should be aware of the consumer buying behaviours
process. Consumer buying behaviour process includes buyer recognition, information
search, and evaluation of alternatives, purchase decision and post purchase decision.
While the Jones family emphasized comparisons between individuals or families with
similar incomes and backgrounds. People did not want to feel left out as new
consumer goods and living standards emerged. More recently, those conditions
changed, and what I have termed the new consumerism emerged. People are now
more likely to compare themselves with, or aspire to the lifestyle of, those far above
them in the economic hierarchy.