Consumer_Behaviour_Assignment_on_Mercedes-Benz

Index Mercedes, “only the best is good enough”. 3 The brand. 3 The consumer decision making process. 4 Need recognition. 4 Means-end theory. 5 Cultural influences. 6 Information search. 7 Alternative evaluation. 9 Multi-attribute attitude model. 10 Functional theory of attitudes of figure 9. 12 Price. 13 Purchase and post-purchase evaluation. 14 Conclusion. 15 Bibliography. 16 Books. 16 Journals. 16 Accessed websites. 17   Mercedes, “only the best is good enough”. For this assignment I chose the fascinating brand Mercedes. It survived 2 world-wars, several crises and over 80 other car manufacturers, and to this day remains one of the leading brands worldwide (Legate, 2006). The brand. According to Mr. Joachim Schmidt, head of sales and marketing at Mercedes, the three core brand values for Mercedes are responsibility, perfection and fascination. This new brand aspiration was presented at the Paris auto-show in September 2010. Figure 1 Brand values of Mercedes (Schmidt, 2010) In my mind, Mercedes has always been a brand that is associated with luxury, wealth, money and status. Many factors have contributed to these associations, such as experience, social learning and marketing. In this assignment I will try to explain how consumers come to their decisions and how this process is influenced by psychological, environmental and marketer-controlled factors.   The consumer decision making process. For most people buying a car will be a high involvement purchase process because there is a high perceived risk involved in buying a car. Therefore, Mercedes has to minimize this perceived risk by informing the consumer in every step of their consumer decision process. Need recognition. The first step in the consumer decision process, or CDP, is need recognition. Mercedes tries to influence this process by pointing out the psychological, social and functional benefits of buying a car. (Wells, 1996) In this ad, for the S-class, Mercedes does this by stressing the need for safety, while also implying other (socio-sexual) benefits to driving a Mercedes. Hereby they are trying to stimulate marketer-induced need recognition and stimulating involvement. Although many people would probably want to own a Mercedes (or a new car in general), not many actually go out and buy one. The desire for a new car has to be strong enough for people to move on to the second phase; information search. In other words, consumers have to be motivated to take action. The means-end theory is a theory that links a product’s Figure 2 the new S-class, with 8 airbags. attributes to the consequences of these attributes for a (adverblog.com) consumer and to the personal values these consequences might reinforce.   Means-end theory. Rokeach (1979) defines values as “an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct”. The means-end model can help to identify the attributes, benefits and values that Mercedes should promote. To clarify, I made a hierarchical map, also called a means-end-chain. Figure 3 means-end chain for Mercedes cars.   Cultural influences. The means-end chain also reflects a consumer’s cultural values. For instance, in the conservative German culture, safety is very important. This can be reflected in buying and consumption patterns. (Asseal, 1998). Mercedes communicates these values through their product attributes, in this case responsibility. An example of how Mercedes uses cultural values is through celebrity endorsement by Lewis Hamilton, a formula 1 driver. It links Mercedes to a glamorous and exciting motor-sport. The intention is to express similarity between Hamilton’s image and Mercedes’ characteristics in such a way that consumers transfer this image to Mercedes cars. (McCracken, 1989) Mercedes has done this so successfully that even without celebrities consumers can link Mercedes to formula 1 and speed, as you can see in the following ads. Figure 4 Lewis Hamilton and the links to Formula 1 in advertisements. When using celebrity endorsements, it is vital to pick the right celebrity. Lewis Hamilton is associated with the following characteristics: he is a young, driven person – a winner. His lifestyle says “work hard, play hard”. This suits the brand Mercedes because they target the (hard-working) business-class, people who have a good job, but also want to enjoy life and allow themselves to spend money on luxury goods. Lewis Hamilton is also a very confident person, who, according to himself, “was born to race and win”. (Hamilton, 2007). Mercedes is also very confident about their products, as their slogan reads “only the best” (Daimler, 2010). This synergy between the celebrities personality and the product must be high in order to enforce classical conditioning. (McCracken, 1989)   Information search. Once a need has been recognized and assessed as being above the threshold for motivation to act, a consumer will move on to the second stage of the CDP; the search for information. Information can be searched for internally (from memory) or externally. The external information can be divided into marketer-dominated and non-marketer-dominated information (Blackwell et al, 2006). Figure 5 overview of information processing (Hong Kong university of science and Technology business school) The model above shows the stages of information processing. The first step is attention: a stimuli has to grab the attention of the consumer. Looking back at figure 2 (the ad about the S-class with 8 airbags) one can see how Mercedes has tried to grab the attention of the viewer. Besides using physical attractiveness and easy to remember images, advertisements can also attract attention when using bright colours (especially red), if it is placed at the front of a magazine (primacy effect) or for instance if it uses moving stimuli (Assael, 1998) As Mercedes delivers products that, for most people, require an extended decision making process the goal for advertisements is different than for a low involvement product like toilet paper. The goal for Mercedes is to attract customers on the long term as well as the short term. This means that they want the brand Mercedes to be known to people, and associated with positive values. Once people than decide to buy a car, Mercedes will be included in the “evoked set” of choice. The evoked set are the alternatives that are considered during the decision making process (Blackwell et al, 2006). To become a part of the evoked set it is vital that people remember the brand Mercedes when thinking about buying a new car. Therefore, it is important to know about how a memory is formed and how it is retrieved. Memory. According to Solomon et al (2006) memory involves a process of acquiring information and storing it over time so that it will be available when needed. This process starts with the sensory organs receiving a stimulus, which we perceive in a way that is unique for every person. Perception is defined by the Longman dictionary (2009) as “the way you think about something and your idea of what it is like”. So we attach our own meaning to a sensory stimulus. The storage that we derive from sensory memory is less than one second. If attention is given to this sensory stimulus then it can be transferred into the short-term memory. But even then, the memory will last less than twenty seconds before it is forgotten. The short term memory, or working memory, holds the information we are currently processing. (Solomon, 2006). Figure 6 Memory (cartoonstock, 2010) When information from the short-term memory is rehearsed it can be stored in the long-term memory, which can store information permanently (Solomon, 2006). Marketers can influence this process by using slogans or jingles to make people remember their product. Mercedes uses the slogan “only the best is good enough”, which was created by one of the founders of the company. They have used it for many years, creating the opportunity for people to remember it by repetition and retrieval. Marketers can also use emotions to influence memory storage. Very strong emotions, such as fear or anger not only get stored in our cortical areas, but also in our limbic system, which allows us to respond quickly to threatening situations. (Hotchkiss, 2008) Figure 7 Memory (about mind, 2005) Mercedes uses emotions in almost all of their TV-commercials. One ad in particular plays into the emotions of all Mercedes-owners. It shows the life of a Mercedes, the owner and the emotional link that connects the two. It can be watched on youtube.com (http://www.youtube.com/watch'v=3rv2-DYgzcY) Although studies have not reached a conclusive number, they all agree on the fact that we see many advertisements each day, whether we notice them or not. Which ones we choose to give attention to varies for each person and is influenced by socio-cultural background. (Britt, 1972) Culture also plays an important role in the perceptual set (how one interprets something). Therefore, advertisement for the Asian market has to vary from the ads used for the European market. In general, the Asian ads are less direct en tend to appeal more on an emotional level, whereas European ads often shock and comparison to competitors is often made (this would be unthinkable in the Asian culture because of loss of face for the competitor). (Scarborough, 2000) Figure 8 a European ad. Figure 9 an Asian ad. When people on the website “brandtags.net” where asked about what they associate Mercedes with, the following words came up: classic, classy, elegance, elite, engineering, expensive, German, luxury, overpriced, prestige, pretentious, quality, rich, solid, star and status. As you can see, most of them are positive attributes which means that the people that visited “brandtags.net” have a positive perception about Mercedes. Alternative evaluation. Once a consumer has recognized the need for a car and has searched for information, they must then evaluate the selected alternatives. What is important in this evaluative stage is the process of creating, reinforcing and changing consumer attitudes. (Blackwell et al, 2006) An attitude is defined by Wells (1996) as “a learned predisposition to act in a consistent way toward an object based on feelings and opinions that result from an evaluation of knowledge about the object”. A model for exploring consumer’s attitude formation is Fishbein’s Multi-attribute-attitude model.   Multi-attribute attitude model. The multi-attribute attitude model, or expectancy-value model, was developed by Martin Fishbein. He saw a consumers evaluation of an object (or in this case brand) as a function of the beliefs that he/she has toward the object on various attributes and the importance of these attributes. A=∑_(i=1)^n Bi Ei A = attitude towards a brand. Bi = beliefs about the brand’s performance on attribute i. Ei = importance attached to attribute i. N = number of attributes considered. (Haugtvedt et al, 2008) To clarify Fishbein’s theory, I have put together an example, using Mercedes and BMW as brands. Attribute Rating (ei) Mercedes (bi) biei for Mercedes BMW (bi) biei for BMW Reliability. 5 +3 +15 +2 +10 Safety. 4 +3 +12 +1 +4 Trendsetting design. 4 +3 +12 +3 +12 Sportiveness. 2 +2 +4 +3 +6 Extensive customer care 4 +3 +12 -1 -4 Attitude = +55 +28 Table 1 Fishbein’s Multi attribute attitude model. The outcome of this model suggests that I would be inclined to buy a Mercedes, rather than a BMW. However, according to many researchers, the connection between attitudes and behaviour seems to be week (Berger, 1989). There are many factors that could interfere with my actual buying behaviour. For instance, if my whole family drives BMW, I might be more inclined to buy a BMW as well, so that I could go to the same garage for maintenance and profit from my families connections.   The revised theory of Fishbein and Ajzen therefore also takes into consideration intentions, subjective norms and attitude towards buying (Ajzen, 1980). Belief toward an outcome » Evaluation of the outcome » Attitude » Behaviour Evaluation of the outcome » Beliefs of what others think » Subjective Norm » What experts think » Motivation to comply with others Table 2 Theory of reasoned action model (Ajzen, 1980). In regard to buying a car, in the first example, I rated safety as important. However if I had to answer if any car was safe enough to drive my newborn baby around in, I would have my doubts. So there is a discrepancy between my attitude and my intended behaviour. A better predictor of behaviour, according to Wilson (1975), would be attitudes toward purchasing. It is more likely that I am going to buy a Mercedes if I say I intent to do so, instead of merely thinking highly of Mercedes’ attributes. Marketing strategies can be based upon existing attitudes, for instance in my case they don’t have to convince me to appreciate Mercedes’ attributes. Marketers just have to reinforce my attitude towards the brand. But it is also important for marketers to be able to change attitudes. The aim of changing attitude is to affect alteration of consumer attitude, while at the same time reinforcing the existing positive attitudes. In the next example I will use Katz’ functional theory of attitudes.   Functional theory of attitudes of figure 9. Figure 10 Mercedes ad for het CL 500, with 4matic all-wheel drive. This ad is also a great example of how Mercedes uses cultural influences in their advertising. The word masterpiece points to the car as well as to the cultural meaning of classical music. It transfers the meaning of the cultural world of classical music into the consumer’s world. Key words to describe classical music are: sophisticated, smooth, passionate, elegant and it is a type of music that is associated with the upper-class in society. Therefore, using Vivaldi’s masterpiece will associate Mercedes with all believes that consumers have about classical music. Price. Under “strategy and goals” on the Daimler-website it says: “We invented the automobile and are passionately shaping its future. As pioneers of automobile design and construction, we intend to continue this unique tradition and to make future mobility safe and sustainable”. Mercedes uses a differentiation strategy, which comes with premium pricing. Whether or not consumers think a high price is worth paying, depends on the perception of the product’s value. Mercedes marketers therefore create an image of a unique car that comes with other benefits such as buying the dream and social identity. Figure 11 Mercedes, buying the dream. With Mercedes you are not buying a car, you are buying a dream(car)- which is priceless. The ad also symbolises the fact that when you buy a new Mercedes, you buy a place in the factory. This means the factory of dreams, but also the real-life factory in Stuttgart where the car is custom made. Even the logo expresses high value, as the three points in the star stand for dominance over sky, earth and see. Even though not many people might know this about the star, it is a well-known fact amongst Mercedes-fanatics who have embraced the Mercedes-culture and defend its values.   Purchase and post-purchase evaluation. Once a product has been purchased, an evaluation of the product and services involved will follow. Mercedes tries to enhance the buyer’s experience by making it as easy and fun as possible. You can configure your own car (online or at the dealer’s office), you can make a test-drive, there is a finance wizard online and numerous possibilities to finance your car, and you have the option of going to the factory in Stuttgart to collect your car. (Mercedes-Benz, 2010) Consumers evaluate the product they bought in light of their own expectations. The goal for Mercedes is to live up to, or exceed these expectations. By evaluation the product, the consumer reduces any uncertainty (perceived risk) that came with the purchase. Consumers try to reassure themselves about making the right choice, thereby reducing post-purchase cognitive dissonance. An interesting view on this was given by psychologist Daryl Bem who, in his self-perception theory, said that consumers will always defend their choice because observations of one’s own behaviour goes before attitude. (Bem, 1972) But even though this might be true for bought products, it is not said that the consumer will buy the same product again in 5 years time. For a customer to keep buying Mercedes, this customer has to be happy with the product and be brand-loyal. So, what is brand loyalty' Brand loyalty can be described as the extent of faithfulness to a particular brand. Brand loyalty can be shown through repeat purchases, but also includes having an emotional attachment and a long-term commitment to a brand. (Buttle, 2009) An important thing for marketers is that when a consumer is brand-loyal, he or she will also promote the brand in daily life. Whether this is done through word of mouth or, the modern version, through word of mouse. In the case of Mercedes, they sell the experience that comes with buying that car and the pleasure of owning that car which means that they also offer post-purchase services, financial services and loyalty programs to enhance the customers satisfaction. Figure 12 Brand loyalty (cartoonstock) Conclusion. Knowledge of consumer behaviour is essential for successful marketing. The goal for marketers is to stimulate consumers to develop favourable attitudes towards their product. It is vital for a marketer to understand what motivates a consumer, what believes he or she has and what brand evaluation follows from that. With their marketing-activities Mercedes focuses on three key attributes: responsibility, fascination and perfection. By doing so they tap into the values desired by their target group, such as feeling in control and high self-esteem. Only when marketers look at the bigger picture, and understand the process behind consumer behaviour can they make the right marketing-decisions.   Bibliography. Books. Ajzen, I. and Fishbein, M. 1980. Understanding attitudes and predicting social behaviour. London (UK): Prentice hall. Ch.12. Assael, H. 1998. Consumer behaviour and marketing action. 6th edition. 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