Consumer Behaviour and Insight Case Study

Consumer Behaviour and Insight

Introduction: Consumer Behaviour and Insight

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The customer decision-creation technique usually includes five fundamental stages. This is the interaction by which buyers assess pursuing a buying choice. The 5 stages are issue acknowledgment, data search, options assessment, buy choice, and post-buy assessment. Thus it can be clear from this that one of the main notions behind conducting this study is to focus on the various notions related to the consumer decision-making process for the selected company L’Oreal and the product segment that has been selected will be its shampoo range. The study will help in becoming familiar with the supporting hypotheses and structures connected with the L’Oreal purchaser purchasing conduct both pre and post-purchase

LO1 Mapping a path to purchase in a given category, including the decision-making process

This report will mark the consumer behavior journey toward the Loreal shampoo range. This portion of the report will attempt to understand the consumer deciding on the product, understand the decision-making processes regarding the product, marketeers' response to decision-making processes, and finally, relevant theories and models that can be applied to the decision-making model.  

P1 the stages of the consumer decision-making journey for a given product/service

The consumer decision-making process of a product is generally divided into five distinct parts that include the following steps:

• Awareness
• Familiarity
• Consideration
• Purchase
• Loyalty

What is interesting is that each aspect gets shorter as it moves forward. This means that the number of consumers who reach the endpoint of the customer journey mapping process which is loyalty is way less in comparison to the ones who reach the endpoint which is loyalty (Trudel 2019). In a diagrammatic representation, the customer journey mapping process can be presented in the following way:

Awareness

Familiarity

Consideration

Purchase

Loyalty

The diagrammatic representation of the customer journey of Loreal clearly shows the vast differences between the first and last aspects of the process. It will be unfair to say that it is one uniform swift process because many consumers stop at consideration and then turn towards other products for the evaluation process. This can be attributed to many reasons; it can be the price point or the quality of the product. Some people move away post the purchase process as well, the major reason for this is generally that the product did not suit them or they have come across a better substitute as a whole. What is concerning for the firm is despite being such an old and renowned brand in the personal care industry, the gap between the first and last aspects of the product ceases to decrease(Islaam et al., 20210. 

P2 Why marketers need to map a path to purchase and understand consumer decision-making 

In layman's terms understanding the process of consumer decision-making is important so that they can be guided to make better decisions regarding their choices in the future. Understanding the basic psychology behind consumer behavior can help a firm to create a more effective marketing pattern that will be more appealing to the target audience. This has a range of steps. Firstly, the identification of the target market is important, as understanding what appeals to them and what factors drive their choices. Moving on, the second step is gathering consumer insights regarding the product, this can only happen with the help of the existing customers, the contribution of potential consumers towards this action is very limited, finally comes the procedure of using this research and information to the best of potential that is possible for a firm. This has a range of benefits:

• This particular pattern helps in designing marketing policies. This information helps the firm to understand the chief driving forces of consumer behavior, if the marketing policies of a product are designed according to the same then it can help the firm strike a bull's eye. In business, the chief motive of any firm is to increase and enhance the production process, which will in turn generate revenue for the firm. This also helps in building the trust of the customers and makes them feel attached to the firm (Mothersbaugh et al., 2020).
• Consumer behavior or decision-making information also gives the firm an idea regarding the pricing strategy. It helps the firm set prices for their product, knowing the demand for their product in the market the firm can set a price that will automatically attract consumers. Most retail brands depend on sales by margin and products that sell on price need to be moderately priced according to the market average to attract, enhance, engage, and retain customers.
• Knowing consumer behavior enables the firm to exploit the best of market opportunities. There are very vibrant examples of this in the product of consideration that has been taken, for example, consumers have been complaining that many of the Loreal shampoos make their hair extremely dry, hence they launched a product called, 'Loreal 6 oils in one, this was enriched with the components of 6 different oils so that the hair does not dry up excessively after the wash,
• The determination of the STP of a product or service also becomes an important outcome of the entire process of consumer mapping. The firms can segment and target their potential customers with the help of this information and then move towards the positioning of the product in a way that will maximize sales.
• Consumer mapping or understating their decision-making process enables the firm to understand the diversity of demands the customers have and hence develop products that will meet the needs of the larger focus groups.
• Finally, the process helps to understand the roles that are played by the consumer as a whole. This helps the firm to understand the demands of the consumers from the firm that include components like the need for recognition as valuable customers from the firm, the information that customers search for regarding the products of the firm, how customers evaluate the alternatives that are present in the market, what influences their purchase decisions and most importantly what kind of behavior do they show post-purchase i.e., do they stick to the product or they go on looking for alternatives, if they look for an alternative then what is the reason behind it and so on(Melnyk et al., 2022).

M1 How marketers are responding to the decision-making process, applying relevant concepts and models

The response of marketers varies according to the targeted customers. In other words, the target market mostly influences the decision of the marketeers. This can be easily explained with the help of Mende low's Matrix framework which is used by most marketers to determine the power or focus groups of the firm:  

Mendelow’s Matrix

There are four parts of the matrix where each box represents a focus group:

• Minimal Effort: this is for those people who are still in the awareness range of the consumer decision-making process and have been stuck there for quite some time and refuse to move forward. These people need minimal effort as they can be just left on their own with the normal advertisements that come up in the firm (Panwar et al., 2019).
• Keep Informed: this is for those people who are somewhere in the middle of the consideration and purchase phase. These people can be kept satisfied with personalized offers such as emails, phone calls, and messages.
• Keep Satisfied: These are the people who have already made purchases from the firm but are yet to become loyal customers. These people need to be satisfied and hence pushed towards loyalty; firms take numerous paths to do so, like personalized offers, gifts, awards, and rewards, and also by asking for customer feedback so that the consumer feels attached to the firm.
• Key players: these are the most important people for the firm. They are loyal customers who have maintained brand loyalty for years and refuse to switch. These people are the main focus groups who need to be treated with utmost care as these people market for the firm using word-of-mouth (Qazzafi 2019).

D1 Application of appropriate theories, concepts, and models that influence and impact the decision-making process

There are mainly two theories that impact the decision-making process of the consumer:

• Normative Decision theory: this theory analyses the outcomes that are possible with the decision-making process and decides on optimal decisions based on the outcome. This theory relies on the aspect of ideal decision-making for a particular situation.
• Optimal decision Theory: this theory mostly depends upon assumptions or prejudices while making a decision instead of relying on original facts and figures (Shim et al., 2018).

In a real-life situation, a person switching products would take the normative decision theory while when they wish to retain their brand loyalty despite visible issues, they would go for the optimal decision theory.

LO2 Evaluate appropriate forms of research to understand influences on the decision-making process (B2C and B2B)

B2B and B2C have their advantages and disadvantages along with their influences on the firm that apply them to their business. This section of the report attempts to focus on the aspects of B2B and B2C business.

P3 Compare and contrast the key differences of the decision-making process in the context of B2C and B2B, providing specific examples.

B2B	B2C
The decision-making process in a B2B business is generally very long. This process includes a range of minor decisions that lead to a major decision as B2B decision-making is mostly seen as a business deal.  Example: A company that is purchasing from a third party.	The decision-making process in a B2C business is usually very short as it needs to happen at a faster pace and the decisions are not that intense in the decree. Example alteration of the price of a product.
B2B business decisions take place more logically and in a very calculated manner.	B2C decision-making is more emotionally drafted.
B2B focuses on making personal relationships	B2C is more focused on transactional relationships (Dangi et al., 2020).

P4 Evaluate the different approaches to market research and methods of research used for understanding the decision-making process in both B2C and B2B contexts 

B2B	B2C
B2B market research is more business-oriented, which means that they use the financial and performance records of other firms as their materials for research.	B2B market research is more consumer-oriented; they focus on the aspect of the needs and requirements of the customers through surveys and customer feedback.
B2B market research is more qualitative in nature	B2C market research is more quantitative
B2B research relies more on the theoretical aspect.	B2C relies on the practical aspect or needs and wants of the customers more definitively.

M2 Provide a coherent and justified evaluation of how different factors influence decision-making and buying behavior, supported by specific examples

The decision-making and buying behavior of customers is something that has been evaluated for a long time by different marketers to provide their firms with distinctive benefits. Different behaviors affect these aspects of consumer behavior. It is important to understand that these two behaviors are interconnected with one another, in other words, the decision-making process of the consumer leads to the decision of the buying behavior of the same. However, interestingly, the factors that influence consumer decision-making are the very same ones that influence buying behavior in a person. The factors that impact both phenomena are mentioned: 

• Situations: this depends on a range of aspects such as the appearance of the product, emergencies where alternatives are not available, the scent of the product, the packaging, and so on. This is however not a stagnant factor and can be changed or replaced easily.
• Personal: these factors include income, gender, occupation, interests, and the type of issue that the product addresses. For example, in the case of Loreal, it is mostly women-centric; men generally do not buy from this firm (R?klaitis, K. and Pilelien? 2019).
• Social: these are the factors that include aspects like demography, religious beliefs, background, ethnicity, sexual orientation, and so on. In general, consumers from the same class exhibit similar purchasing behavior, and hence these are the good focus or target groups for the firms.
• Psychological: this is an exceptionally personal trait that focuses on the mindset and perception of needs of the consumers along with the influences. This includes peer pressure and community influences.

LO3 Evaluate how marketers influence the different stages of the decision-making process

As it has been abundantly proven so far in this report that a decision-making process has various stages and marketers wish to influence each of these stages for an organic and preferred outcome. The influencing strategies are the main areas of discussion in this section. 

P5 Evaluate how marketers can influence the different stages of the decision-making process of B2C and B2B

Steps of decision making	B2B	B2C
Identification of the decision	Portraying it as a new challenge or opportunity.	Requirement for a new campaign
Gathering information	Allowing only positive information to circulate in the market	Building explanation of negative reviews.
Identification of alternatives	Building up its portfolio to look like the most desired one from the lot.	Extensive campaigning for the product.
Analyze evidence	Maintain the portfolio	Continuation of marketing with more intensity.
Choosing among alternatives	Maintain the portfolio	Maintaining the image of the most wanted and value-giving firm.
Acting	Be ready for any questions or queries that might arise.	Be ready for any questions or queries that might arise.
Reviewing the decision	Maintaining its brand portfolio for maximum business benefit.	Maintaining its brand portfolio, customer engagement, and maximum levels of customer satisfaction for maximum business benefit (Durakovi?, B. and Cosic 2019).

 

M3 Critically evaluates how marketers influence each stage of the decision-making process concerning relevant methods and models applied. 

• Rational Model: this model believes in the analysis of each aspect of the decision and keeping a sharp eye on its outcome. This theory is used by marketers to target those customers who are at a stage where they want to switch products.
• Administrative Model: this model believes in the power of alternatives and hence marketers use this model on the people who are at the consideration or evaluation phase of decision-making. This is used when marketers wish to turn customers to their side by eliminating the alternatives through effective marketing (Chukwu et al., 2019).
• Political Model: this model states that decisions are made out of intuition, prejudices, and assumptions. Marketers use it at the phase of awareness so that they can turn the customer's notice towards the product at the very initial level for the benefit.

Conclusion

So, from the overall study it can be concluded that in the case of the L’Oreal shampoo range, consumer decision-making plays a very important role. The success of the product usually depends on the L’Oreal Client which decides both pre and post-purchase use. Also, the use of various theories and consumer mapping has tactfully accomplished that additionally helped in achieving the overall objectives of the entire study.

References

Chukwu, B.A., Kanu, E.C. and Ezeabogu, A.N., 2019. The impact of advertising on consumers' buying behavior. International Journal of Arts and Commerce, 8(1), pp.1-15.

Dangi, N., Gupta, S.K. and Narula, S.A., 2020. Consumer buying behavior and purchase intention of organic food: a conceptual framework. Management of Environmental Quality: An International Journal.

Durakovi?, B. and Cosic, A., 2019. Impact of quality and innovation strategies on business performance of Bosnian B2B and B2C companies. Sustainable Engineering and Innovation, 1(1), pp.24-33.

Islam, M.T., Huda, N., Baumber, A., Shumon, R., Zaman, A., Ali, F., Hossain, R. and Sahajwalla, V., 2021. A global review of consumer behavior towards e-waste and implications for the circular economy. Journal of Cleaner Production, 316, p.128297.

Melnyk, V., Carrillat, F.A. and Melnyk, V., 2022. The influence of social norms on consumer behavior: A meta-analysis. Journal of Marketing, 86(3), pp.98-120.

Mothersbaugh, D.L., Hawkins, D.I., Kleiser, S.B., Mothersbaugh, L.L. and Watson, C.F., 2020. Consumer behavior: Building marketing strategy. New York, NY, USA: McGraw-Hill Education.

Panwar, D., Anand, S., Ali, F. and Singal, K., 2019. Consumer decision-making process models and their applications to market strategy. International Management Review, 15(1), pp.36-44.

Qazzafi, S.H.E.I.K.H., 2019. Consumer buying decision process toward products. International Journal of Scientific Research and Engineering Development, 2(5), pp.130-134.

R?klaitis, K. and Pilelien?, L., 2019. Principle differences between B2B and B2C marketing communication processes. Organizacijø Vadyba: Sisteminiai Tyrimai, (81), pp.73-86.

Shim, D., Shin, J. and Kwak, S.Y., 2018. Modeling the consumer decision?making process to identify key drivers and bottlenecks in the adoption of environmentally friendly products. Business Strategy and the Environment, 27(8), pp.1409-1421.

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