HK 2011


BUYER BEHAVIOUR


ASSIGNMENT 1



 



Table of content



1. Introduction…………………………………………………………. 1


2. Market segmentation……………………………………………. 1


3. Product positioning………………………………………………. 2


4. Pricing …………………………………………………………………. 3


5. Distribution strategy…………………………………………….. 5


6. Promotion Strategy………………………………………………. 6


7. Product………………………………………………………………. 10


8. References………………………………………………………….. 12



 



1. Introduction



The Sony Play Station Portable (PSP) has just approach into the Australia market. It


packs a powerful multimedia punch and provides consumers to enjoy the favorite games,


music, videos and photos instantly anytime. Factor in the PSP system’s brilliant high –


resolution screen and cutting – edge wireless connectivity and internet browser.


According to the leads over the pond at the register, Sony 185,000 PSP’s in the UK this


past weekend, smashing the previous three – day record, set by Nintendo’s DC. Sony’s


sales, said market watcher chart track, which provided the statistic, makes the PSP’s UK


debut the most successful console introduction in the territory yet. The PSP went on sale


in the UK on Thursday, 1st September, and chart Track’s total combines sales on that day


plus those of Friday and Saturday Nintendo sold 87,000 DS handhelds in the first three


days of the device’s availability, Blimey that’s a lot of PSP’s.



2. Market segmentation



(D. Decision – process influences)



1. Do different individuals use different evaluative criteria in selecting the product?


First of all, consumers consider a set of evaluative criteria before buying a product.


Secondly, different customers would use different sets of evaluative criteria.


According to the text book, “evaluative criteria are the various features a


consumer looks for in response to a particular type of problem.” So that


evaluative criteria depends on the person purchasing. For example, before


purchasing a PSP, a consumer may concern with number of games available,


screen resolution, and space of memory. These are evaluative criteria for people


who just want to play games on the console. On the other hand, someone else


could approach to PSP with a totally different set of evaluative criteria, such as


number of movies available, shape, sound effect, speed for internet surfing. These


criteria are used by people treat PSP as a multimedia entertaining machine.


Therefore, for the same product, different individuals would use different


evaluative criteria.


2. Do potential customers differ in their loyalty to existing products/brands?


In this case, potential customers can be divided into two groups, users and stickto-


Sony customers. Users will pay attention to new product and games; it’s


relatively hard for them to be loyal to any existing products/brands. Sony Loyalty


customers, which might be minority, will stick to their loyal brand, they will


intend to buy new product from Sony, include PSP.



3. Product positioning



(B. Decision-process influences)



1. Which evaluative criteria are used in the purchase decision?


These evaluative criteria can be used in the purchase decision:


• Price – Price is a fundamental evaluative criterion for most of customers.


Customers have to be provided with relative purchasing power before they enter


the purchasing process.


• Battery consumption – Battery is an important evaluative criteria when


purchasing a portable console, or portable multimedia player. Customers would


prefer the battery can last longer for long usage time.


• Memory space – Memory space relates to how many times that games can be


saved, capacity for downloadable content, movie trailers and other essential


information. Consumers would prefer a bigger memory while using.


• Games – For loyalty and games players, games choice is very important. More


games can be played with the console, more consumers would be attracted. For


example, some consumers they might not plan to buy a PSP. But if they saw some


games that they interested in, they might consider buying one. Moreover, games’


price is also an important evaluative criterion. The games’ price can influence the


sale of the console because of games are complement goods to the console, if the


price is too high, it will influence other consumers’ decision.


• User interface friendly – Whether the console is easy-of-use.


• Screen (resolution and size) – A high resolution screen can provide a better vision


effect to players, such as color and the 3D vision. Some consumers would pay


more attention to the vision effect. Besides large screen size makes better effect as


well.


• Multiplayer allowance – Multiplayer allowance could definitely bring more fun. It


allows players play against the others by connecting consoles together.


• Compatibility – Whether the console can be connected to other related consoles or


computers for exchanging data and information.


• Accessory – Accessories, such as memory stick Duo, AC adaptor, battery pack,


headphones with remote control, soft case and wrist strap, car adaptor, accessory


carrying case and cleaning cloth. Accessories also can be part of the evaluative


criteria for consumers seek for better outfit.


• Life – How long it can be used until it’s replaced by next-generation consoles,


and secondly the usage life.


• Warranty – Warranty is kind of the confident that the Company gives consumers.


A good warranty condition can influence a consumers’ decision.


• Loading time – Loading time which is the loading speed. It’s very annoyed by


spending long time waiting until the game is loaded while playing. Less loading


time refers to the hardware and space of memory.



4. Pricing



(D. Decision – process factors)



1. Can a low price be used to trigger problem recognition?


According to the text book, “Problem recognition is the first stage in the


consumer decision process and it must occur before decision making can


begin…the recognition of a problem is the result of a discrepancy between a


desired state and an actual state which is sufficient to arouse and activate the


decision process.” In this case, whether to purchase a PSP refers to the problem


recognition.


In current console market, PSP is the latest and the most expensive one, the


official console price for PSP is 9, games and UMD movies vary from .95


to .95, although PSP equipped with multimedia playing ability, most people


would buy PSP as a console only. The price is a bit high for customers who


mainly are low-income teenagers. Indeed, lowering price would definitely trigger


problem recognition. For example, when the PSP approached into the market,


consumers might not be ready to buy a PSP due to lack of purchasing power. If


they see the PSP with a reasonable price, they might be interested to buy one.


2. Is price an important evaluative criterion? Is price likely to serve as a surrogate


indicator of quality?


Price probable is certainly an important evaluative criterion for consumers before


purchasing a product. Firstly, before purchasing a new product, consumer had to


consider their purchasing power. Every consumer has different purchasing power,


such as different people have different income. Secondly, if the price is


reasonable, people who are not interested in playing games may start to pay


attention to PSP’s other functions; they may end up buying PSP as portable


multimedia player. Therefore, price can influence consumer to make a decision on


buying things thus it is an important evaluative criterion.


In this case, price is likely to serve as a surrogate indicator of quality. The PSP is


made by most advanced technologies and hi–tech electronic materials which


normally cost higher price, in another word, the cost would be low if the parts are


outdated and low-end. Therefore, most of electronic product equipped with


outstanding performance cost higher than the rest in the market. Regards to PSP,


the price can be seen as a surrogate indicator of quality.


3. Are consumer likely to respond to in-store price reductions?


Consumers are likely to respond to in-store price reductions, for the reason that


will increase the customer purchase motivation, as well as the price is the most


important evaluative criterion. The customers always walk into store to browse or


check the information of products. When they saw the price is reduced,


sometimes they will purchase the items immediately.



5. Distribution strategy



(D. Decision-process factors)



1. What outlets are in the segment’s evoked set (the set of alternatives that will be


considered for the solution of a particular problem)? Will consumers in this segment seek


information in this type of outlet?


There are 13 outlets when customers seek for purchasing:


• EB Games


• GameRush


• MYER


• Harvey Norman


• Dick Smith


• JB Hi-Fi


• Target


• Big W


• K-Mart


• DoDo Shop


• Duty Free Shop


• Sony Shop


• E-Shop


According to research the Dick Smith sells PSP at 394 dollars and 350 dollars


member price in


www.kutoo.com.au. In addition the Downtown Duty Free Shop

sells a kind of PSP package; included one PSP console and one game for 0.


Most customers will not seek information in this type of store because PSP


already publish and put in circulation in America, Japan, and some Asian


countries. The most of them already got the information from internet or


magazines. Nevertheless, there are some players will still seek information from


the outlets, such as price.


2. Which evaluate criteria does this segment use to evaluate outlets?


These evaluative criteria can be used to evaluate outlets:


The evoked set for buying a PSP:


1. EB Games


2. GameRush


3. Sony Shop


• Price – price is the most important criteria that will influence customer to


buy the product.


• Location – people would always look for product in the closest outlet.


• Promotions – special offers will always attract customers such as


Downtown Duty Free shops promote the special PSP package.


• Refund policy – such as Myer have the good refund policy, if customer not


satisfied the performance of products, they can bring the receipt and


product to return and get totally refund within 14 days.


• Warranty – warranty is very important for the new technology product, if


the machinery is broken down the warranty will free repair within the


period of guarantee


• Option of Game – due to PSP just new arriver, some stores don’t have too


many choices of the games


• Staff – staff’s knowledge of PSP is important for customer to seek


information and also staff’s attitude in attending to customers


• Financing – customer can to have possession of PSP immediate just to pay


small amount of deposit


3. Is the outlet selected before, after or simultaneously with the product/ brand? To what


extent are product decisions made in the retail outlet?


In this case, for purchasing a PSP, consumers often select outlet after the product


or brand. As we mentioned before, PSP had been released earlier in other


countries. Most of the players have already made a decision to buy a PSP before it


approach into Australian market and they put the deposit in pre-order list from


different outlets. The outlets for PSP player is not really important, cause the most


important is to get the PSP.



6. Promotion Strategy



(D. Decision-process influences)



1. Will problem recognition occur naturally or must it be activated by advertising?


Should generic or selective problem recognition be generated?


There are two kinds of situations, for the loyal customers or people interested in


new technology or novel staff the problem recognition occurs naturally. They


would keep seeking latest information and always be aware of new stuff. But for


most of non-players who are not always tend to master all this sort of information,


problem recognition must be activated by advertising then, such as parents choose


their kid’s birthday presents, they may started thinking of buying after browse an


ad.


Generic problem recognition refers to the recognition of a discrepancy that a


variety of brands within a product category can reduce. Selective problem


recognition refers to the recognition of a discrepancy that only one brand in the


product category can solve. (Neal, Cathy M. 2002) In this PSP case the generic


problem recognition was generated, for the reason that PSP is not the very only


product when people goes after a portable console or a portable multimedia player,


there are many other brands can be found as NDS and GBA or PDA and palm.


2. Will the segment seek out or attend to product information prior to problem


recognition, or must its members be reached when they are seeking the information? Can


low-involvement learning processes be used effectively? What information sources are


used?


In this case, there are two groups of potential customers. One group is PSP


players who are interested in video games or trendy stuff. These customers will


seek out or attend to product information prior to problem recognition. And others


would attend to stores or official webpage and brochures for getting information.


It is believed that low-involvement learning processes be used effectively. Lowinvolvement


products which are bought frequently and with a minimum of


thought and effort because they are not of vital concern nor have any great impact


on the consumer’s lifestyle. Advertising can persuade the customer, especially


where low-involvement products are concerned. There are few information


sources are normally used, Internet, magazine, newspaper and Internet.


3. After problem recognition, will the segment seek out information on the product/brand,


or will we need to intervene in the purchase-decision process? If they do seek information,


what sources are used?


In Australia, segment will definitely seek out information on the product. Due to


the release of Australian version is half a year after launch in Asia and North


America. Setting information and users’ feedback from those areas can be viewed


from internet and presswork. They are helpful for customers to get an in-depth


introduction. But at the same time, after problem recognition, customers will go to


different stores and enquire for detailed price and promotions, so they can get the


best deal. Therefore, dealers don’t have to intervene the purchase-decision process,


but they would influence customers’ directions.


When customers seek information themselves, they may use internet, game


magazine or information from friends.


4. What types of information are used to make a decision?


There are 7 types of information to make a decision, and this sticks to the


marketing theories:


1. Product


2. Place


3. Promotion


4. People


5. Physical evidence


6. Process


7. Price


5. How much, and what types of, information is acquired at the point of purchase?


The PSP has just approach Australia’s market, the price is 9.95. Moreover,


normally game magazine cost around to , internet and BBS fees cost no


more than , virtual mail is for free.


6. Is post-purchase dissonance likely? Can it be reduced through the promotional


campaign?


Yes. According to text book that post-purchase dissonance means doubt or


anxiety about the correctness of one’s decision after a purchase has been made.


Yes, it can be reduced through the promotional campaign. However, the after


service and refund policy must be very straight-forward and comprehensive, for


instance if consumers are dissatisfied with the performance of PSP, whether it can


be refund or the after service can be charged in reasonable price. There are also a


special pack for sale such as buy one PSP plus 2 games for 9.


7. Has sufficient information been given to ensure proper product use?


According to research, since the release of PSP in Asia and North America, Sony


started throwing several promotional campaigns in Australia for preparing the


official launch of Australian version (Area 4), billboard mostly. The content


describes an obvious PSP logo trailed by a series of well-regulated notes, game


controllers, and film frames, and they all go into the pocket located on the back of


a girl’s jeans. This billboard graphically describes the major functions that PSP


equipped.


On the other hand, virtual ad-mails were sent to Sony Playstation members in OZ


and Playstation world-wide official homepage present a detailed description of


PSP’s features and introduced the best way to maintain the PSP for achieving best


performance and usage life.


Moreover, there are different kinds of presswork in those outlets sell PSP. The


presswork gives potential customers a general idea of PSP’s performance and


functions.


So, apart from any unexpected quality problems occurring, Sony has provided


sufficient information which ensures the proper use of the product.


8. Are the expectations generated by the promotional campaign consistent with the


product’s performance?


PSP’s Australian version (area 4) was released on 1st Sep 2005. According to


observation; there are large crowd of pre-ordered people waiting for the launch in


front of every game outlet around 00:00am, local TV channels reported such


situation. It proves that Australian players were possessed with high expectations.


Since then, regards to interview with outlet staff and press released on Sony


official webpage, the sales of PSP kept increasing, it is no doubt that PSP’s


outstanding hardware and software have attracted more and more people and


satisfy them. It is to be believed that PSP will take over considerable amount of


market in a short period of time.


9. Are the messages designed to encourage repeat purchases, brand loyal purchase, or


neither?


From those messages delivered to customers in Australia, there are not any signs


or metaphors indicating encouragement of repeat purchases. One thing is to be


considered, PSP in white color has just been released in Asia, so it may land in


Australia sooner or later. It may affect people who are console collectors, but


there are not any promotions about white PSP until today, and spend 9 just for


a color change might not be accepted by most of players.


Besides, Sony didn’t monopolize the issuance of accessories, so speakers screen


protectors developed by Logitech, and PSP bag made by Porter are all available in


the market, and Sony didn’t force customers to purchase PSP and accessories


from Sony shop only. In this case, Sony doesn’t anxious to establish customers’


brand loyalty towards PSP, but as complement goods to PSP, games and UMD


movies will help PSP to take over the console market for sure.



7. Product



(D Decision-process influences)



D.1. Does the product/brand perform better than the alternatives on the key set of


evaluative criteria used by this segment?


PSP = Sony’s Playstation Portable


NDS = Nintendo’s Dream Swan


GBA = Nintendo’s Game Boy


Advance


(Ratings varies from 1~3, 1 = worst, 3


= best)


According to the statistics, PSP


successes in most evaluative criteria


when compare with NDS and GBA


(won 8 out of 12).


Evaluative criteria PSP NDS GBA


Price 1 3 2


Battery consumption 1 3 2


Memory space 3 1 2


Games 1 3 2


User interface friendly 3 3 2


Screen (size & resolution) 3 2 2


Multiplayer allowance 3 1 1


Compatibility 3 1 2


Accessory 3 1 2


Life 3 2 3


Warranty 3 2 3


Loading time 1 3 2



8. References



• Neal, Quester and Hawkins, 2002, Consumer Behavior: Implications for


Marketing Strategy, 3/e McGraw-Hill.



www.au.playstation.com


www.kutoo.com.au


www.yourpsp.com.au



Credit:ivythesis.typepad.com


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