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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