MANAGEMENT 3210Y CONSUMER BEHAVIOUR Group Research Project Introduction Companies must understand why their consumers purchase, or perhaps more importantly, do not purchase their products or services. The aim of this project is to understand the consumers of a particular product or service in the context of the industry environment. What is the company doing at present to satisfy its customers? Why are their customers buying or failing to buy the company’s product or service, and where, if possible, could the company improve it understanding of its customers. The group research project is a semester-long project done in groups of four and consists of a written report and a class presentation. The project is broken down into four topic areas. Although all group members should contribute to each part of the project, it often works best if one person has responsibility for a particular section. For this project assume that your group is a small marketing consulting firm hired to help the company of your choice gain a better understanding of its consumer base. The management of this company feels they have "lost touch" with their consumers. They have asked you to provide them with a complete picture of the factors that influence their consumers’ purchase decisions. Since you will need to examine attitudes and purchasing behaviours it is easiest to use friends and family for this, so choose a company and product or service used by people you know. You should choose a product that interests you, since you will spend a great deal of time learning about it, its consumers, and the company that markets it. You should also choose a product that requires some consideration before purchase, but one that is purchased frequently enough that you will not have difficulty locating purchasers. This project is easier if you choose products or services that have a well-defined target market, and are relatively inexpensive. Groups will be formed the second week of class. Time will be also be provided during this class to discuss potential topics and how your group intends to work. Two weeks afterwards you need to submit your team name and company and product(s) selected. Objectives To provide a real-life application and understanding of the concepts and principles of consumer behaviour learned throughout the course. To develop skills working in groups To develop leadership and presentation skills. Topics 1. Secondary data and advertising analysis. The aim of this topic area is to gain an understanding of the current situation. You will need to collect pertinent secondary data on the product or service of your choice and its market. As well, you will need information on the company and industry within which it operates. Company data should include a brief history, its products, product lines and brands, and marketing mix. Industry analysis should look at trends, what competitors are doing, and the demographics of the target market. For this section you may also find it useful to do a SWOT analysis and look at the company’s objectives, sales volumes, industry size, any particular legislative or political issues etc. This section needs to be kept short, however, as the main focus is on the consumers not the company or industry. The second part of this topic area involves performing an analysis of the advertising. You should seek out advertisements for the product and analyze them. Pay particular attention to the use of semiotics - examine the symbols used within the ads, and interpret the meanings of these symbols. What do the advertisements tell you about the product’s consumers? Or, more precisely, what the company thinks about their consumers. 2. Personality, the self, and psychographics. You should examine how issues of one's personality and self-image affect purchasing and use decisions for your chosen product. Additionally, you will need to examine how psychographics and lifestyles affect product usage. You will need to both observe and interview product users for this topic area. You should observe people in the shopping environment making their purchase decision. What lifestyle factors do the consumers seem to have in common? Do they seem to share any common personality traits? You should also interview users of the product (it’s easiest to use people you know). Do the product users have any common personality traits or lifestyles? Does the product affect their self-image? Try to uncover all pertinent information relevant to how personality, the self, and psychographics might affect product purchase and consumption. 3. Attitudes and decision-making. Construct a general associative network for your product. To do this you will need to first uncover the associative networks of at least eight people, then analyse these networks for patterns and similarities. Create an overall associative network based on the similarities you identify. To what extent has the company displayed an awareness of its consumer’s associative networks in its marketing mix? Examine consumer attitudes toward the product. Are attitudes extreme or moderate? Are they strongly held? How do product attitudes seem to be formed and changed? Examine the consumer decision-making process for your product. What level of involvement do people have? How do people come to the decision to purchase this product? You should observe several consumers as they make their product purchase decision. You should also interview several people and have them describe the mental process they go through when making the purchase decision for your product. If they are loyal users, you may want to have them recall the first time they purchased the product. 4. Group influences. Examine how other people affect the purchase decision for your product. Do reference groups influence the purchase decision? Is conformity a factor? Are opinion leaders influential? You should observe people as they purchase the product and interview those who have purchased the product in order to assess the effect of others on purchasing behaviour. Is word of mouth an important factor for purchasing your product? How does word of mouth flow? How important is the sales environment or sales person. 2 Research Methods You will need to conduct both secondary and primary research in order to gather the information for the various topic areas. You should use some, or all of the following methods: literature review, observation, in-depth interviews, and surveys. Requirements for each method are as follows: Literature Review For this project you will need to review literature to direct your research in each of the topic areas. You will need to find secondary information on the company and product itself as well as the industry. You should also summarize and review articles related to how the topic area affects purchase and consumption of the product or product category. It is unlikely that you will find articles relating to your specific product but should find articles relating to your product category. For example if you chose to study Levi jeans, you might seek out articles that analyse how one’s clothing affects one’s self-image. You should rely primarily on research published in academic journals (e.g. Journal of Consumer Research, Journal of Consumer Psychology, Journal of Advertising, Journal of Advertising Research, Journal of Marketing, Journal of Applied Social Psychology, Journal of Personality and Social Psychology). This may be supplemented with articles from the popular press or the Internet. Check out sites like epinions, rip-off report etc. Observation: This involves watching the product purchasers, and carefully recording relevant information. You then analyse your notes for important patterns. At least two hours of observation is necessary. Be sure to include in your report exactly where and when our observations were conducted. Give specific examples to support the patterns you extract. In-Depth Interviews: These are one-on-one interviews in which you attempt to gain a deep understanding of the respondent’s thoughts with regard to your product. The key to in-depth interviews is to probe beyond the respondent’s initial response in order to uncover closely held information. You should develop an interview guide prior to the interviews. During the interviews you should generally follow the guide, but allow yourself to stray if it seems that you have identified other interesting avenues to pursue. You should also continue to probe for more detailed responses to each question you ask. Write down all answers and analyse them after the interviews. Try to extract themes and similarities from the subject’s responses. In depth interviews should last approximately 45 minutes, and at least four should be conducted. Include a copy of your interview guide in your final report. Survey: You may want to conduct a survey of product purchasers. Craft your survey carefully to ensure that you obtain the desired information without confusing your subjects. Use lots of open-ended questions and ensure that you know what it is you want to learn or find out. Since marketing research is not a prerequisite for this course, statistical analyses are not expected, although you should report means and frequencies where appropriate. You should also report means by specific categories of interest. For example, if purchasing patterns seem to differ for men and women, you should report male means and female means. The survey should be relatively short to encourage participation. As a guideline it should take subjects less than 10 minutes to complete. You should survey at least 40 people. Group Report The report should be seamless, i.e. it should not appear to be the work of four individuals pasted together, and must be in business format (i.e. executive summary, table of contents, etc) and limited to a maximum of 25 double-spaced pages (excluding exhibits and appendices). It is due the last day of presentations. It should also provide some indication of how well the company understands its consumers and make some recommendations on improving the marketing of the product or service. Note, however, that the intent of this project is not to develop a marketing plan. All information presented in the report must be clearly documented in the body of the report as well as in the reference section at the end. Use APA citation style within the text in your bibliography (U of L Library home page has a link that demonstrates accurate APA citation style) The report should also include an appendix containing the following. A print out of any PowerPoint presentation Any questionnaires, surveys, interview guides, etc. (Do not include raw data from surveys) Copies of any print advertisements if not included in the body of the report. (if the ads are discussed in the body of the report it is usually better if the ads are also included in the body of the report) Group presentation Each group will give a final presentation to the class limited to a maximum of 30 minutes. Presentations will be given the last two classes of the semester. Presentation order will be determined the week before presentations by drawing lots. If there is a compelling reason for giving the presentation on a particular date please let me know ahead of time. The presentation should review and synthesize the report. You should focus on bringing the information together to provide a coherent picture of the product’s consumers. Do not simply “tack together” four separate presentations – integrate and synthesize the information. Each member of the group should participate in the presentation. Assume that you are presenting to the senior management team of your selected company. The class takes the role of management, and is responsible for asking questions so be prepared for challenges. In addition to being informative the presentation should be fun. There are marks for originality and for getting the class involved. In the past groups have done skits, shown videos, played games, handed out questionnaires etc. Evaluation Criteria The report and presentation is worth 35% of the final grade. Report (25/35) Quality of analysis and research insights from related theory and concepts, Style and organization of report Innovative and persuasive aspects of your project. Presentation (10/35) Smoothness of presentation, Quality of visual aids, overheads, hand-outs, videos, etc., Ability to attract and retain the interest of the classroom audience. Originality 4