Consumer Behaviour Analysis And Marketing Strategy: A Case Study Of Danone, An Essay.

This assessment is a culmination piece, in which you will be given an opportunity to combine the information you have accumulated in Assessments 1 and 2. More importantly, you will need to showcase an understanding of marketing issues related to consumer behaviour such as attitudes, group influences, culture, social class, consumer learning processes, and personal buying decision-making processes.

The Task: Based on the scenario below, you are required to write a 2000-word report. In this report, you must demonstrate an understanding and application of various consumer behaviour concepts and theories by analysing the facts gathered from the video and the survey, and present strategic recommendations. You will be required to incorporate recent peer-reviewed literature in order to justify your proposed recommendations.

Scenario: Imagine that you have just been employed by the company of your chosen FMCG product that you analysed in your earlier assessments. You have recently learnt that the company’s customer loyalty has declined over the last year and that repeat purchases are at a historic low.

You have now been asked to prepare a report in which you must critically analyse company’s current marketing strategy and marketing communication mix and its alignment to your findings in assessment 1 and 2. More specifically, you will need to determine if identified consumer behavioural factors in previous assessments align with company’s current marketing focus. Based on your analysis, you are also required to provide at least three strategic recommendations to the board of directors, along with reasons for recommending further improvements, all of which must be based on scholarly sources.

Consumer Behaviour Concepts and Theories

Consumer behavior is one of the most essential attributes that need to be considered while aiming towards a constructive and sustainable development of a business organization. The various business approaches and marketing strategies depend heavily on the changing needs and expectations of the specific customers (Smith 2015). With changes in the behavioral patterns of the consumers, the producer organizations need to make relevant changes in their organizational processes that would best suit with the existing demands and requirements. Consumer behavior depends extensively on a wide range of factors including economical, social, technological and cultural aspects.

With the advent of globalization and technological revolution, the economic and social statuses of most of the consumers have improved to an extent that identified a gradual shift from quantity to quality (Grew 2018). Consumers today are much more aware regarding the products they consume and the age of internet has made it easier for them to retrieve more information regarding the Company, available products, their organizational ethics and quality of products. Therefore, analyzing consumer behavior is one of the most important elements in the process of identifying appropriate marketing strategies.

Danone is one of the largest manufacturers and suppliers of FMCG products, based in Paris. It is a multi-national Company spread all over the world that essentially deals with FMCG products like dairy products, plant-based products and mineral water bottles. FMCG refers to the Fast Moving Consumer Goods that include packaged goods, which can be sold relatively faster and at a lower price (Dosé and Åström 2017). Danone is one of the largest suppliers of dairy food products and packaged drinking water, with ‘health’ and ‘well-being’ as their main motto. The Company strives to emphasize on the inter-relationship of consumer health with the health of the environment and therefore, focuses on a sustainable business approach (Jose 2017).

In order to deal with the current challenges faced by the Company, a thorough analysis of its business procedure needs to be conducted, in order to identify and understand the various areas the various areas that fail to adapt with changing consumer behavior (Krzy?anowska and Tkaczyk 2015). Since the Company has been facing challenges in customer loyalty, the particular consumer discontent with the organization needs to be analyzed and rectified in order to bring about effective changes. The marketing strategy and the marketing mix of the Company have been critically analyzed below, in the light of the conducted consumer survey. This analysis will be further used to prescribe appropriate strategies for the Company that would control the existing issues in concern.

Current Marketing Strategy and Communication Mix of Danone

Danone’s marketing strategy revolves around the sustainability and health of consumers as well as the environment. The Company firmly believes that the health of the consumers is directly related to the health of the environment. The main objective of the organization is to bring about healthier and more nutritional choices, when it comes to eating and drinking habits. It encourages a kind of revolution in the food industry that constantly focuses on health and sustainability of both, the consumers as well as the planet.

In order to adapt to the recurring changes in consumer behavior, Danone has adopted policies and activities that essentially cater to their changing expectations (Vinayagamoorthy and Kannan 2015). With considerable advancements in economy and technology, consumers are now more health conscious than ever, with free access to unlimited data and information from the internet. With increasing jobs and responsibilities, consumers now depend more on fast food products that are easily available and easily disposable. Therefore, Danone offers a wide variety of dairy products that are rich in nutrients and minerals and packaged water bottles. However, the survey conducted on the consumers of the industry indicate that the products have other alternatives in the market, which are equal or better in quality and pose a stiff competition for Danone’s goods. In order to effectively implement their unique strategy, the Company needs to revise the quality of the products so as to provide better quality health supplements than the ones available in the market.

The socio-economic changes in current consumers hint towards a more sensitized understanding of consumption and the resources of nature (Wong and Candolin 2015). Danone takes up this need for a healthier and more sustainable food practices that would not only prove beneficial for the consumers but also for the planet as a whole. The organization has taken up various activities and programs that repeatedly emphasize on the sustainability of the environment and especially focuses on the management of its particular resources i.e. milk, water and plastic. The efficient management of these resources would not only ensure health and well-being of the target consumers of the Company but also the longevity and sustenance of the organization itself. However, in spite of taking up healthier measures and sustainable strategies, the Company faces a loss of customer loyalty based on various aspects of the product, taste, price, available alternatives and more.

Investigating the Marketing Mix of the Company would give us a better view of each individual marketing factor that plays a strong role in affecting consumers’ behavior patterns (Bahl and Chandra 2018). The four most important elements of a marketing mix that dominate consumer behavior and are used by the organization to reach its particular targets are factors pertaining to the pricing of the product, its quality, its promotion and its availability to all sections of the society. The four marketing pillars of Danone that readily affect consumer behavior have been critically analyzed below, in relation to the conducted survey.

Marketing Mix Analysis of Danone

Price- Though the Company has taken effective steps to reduce their cost of production, the price of the final product is still more than the average price of the available alternatives. The main derivation from the survey identifies the need to curb the price of Danone products, which is one of the leading factors for losing customer-base. More than 25% of respondents claimed it very likely that they would buy the product if it was available at a lower price. Therefore, one of the major issues marketing mix is the incredibly high price of products that are not affordable by a majority of the consumers.

Product Quality- The second most important element is the quality of the product offered and from the responses of consumers it can be identified that though the Company ensures high nutritional value, it has evidently failed the expectations of the customers for its bland taste. As per the survey, the maximum number of respondents remained neutral, when asked about the product quality. More than 15% of the total respondents have claimed it to be of low quality.

Promotion- The promotion of the Danone products are exclusively centered towards health and sustenance of the consumers as well as the environment and therefore their respective promotion strategies revolve around sustainability and adding more value to their product. As per the results of the survey, the Company has been more or less innovative with their promotional ideas but failed to attract all sections of the society.

Physical Evidence- This attribute refers to the physical attributes of the products, for example packaging, availability and accessibility of the product. According to (MITELU? et al. 2015), as manufacturers of drinking water bottles and perishable dairy products, the Company needs to invest considerable amount of money and energy on sustainable and innovative physical evidence that would be appealing for the consumers as well as healthy for the environment.

In order to effectively implement the derivations from the conducted research, a relevant strategy needs to be devised. This marketing strategy would be responsible for reducing all the unwanted elements in the system by adding more value to the end product (Petrou, Demerouti and Schaufeli 2018). The various strategic recommendations as derived from the conducted research are briefly discussed below:

• Price- Since, the high pricing of the product is one of the leading reasons for losing their customer’s loyalty, respective measures must be adopted to reduce their production costs. The organization has surprisingly high cost of production as the goods that they produce are perishable and need to be innovatively packaged for their longer sustenance(Thakur and Soni 2018). Their obsession on making the health product rich in nutrients has led it to be a relatively expensive product that cannot be afforded by a large section of the society.
• Quality-In the process of measuring quality, Company must take into consideration the reviews of the customers regarding the value of the product and its possible shortcomings. In order to create more value for the product the Company needs to improve its taste and make it more attractive for the customers (Haw 2017).
• Target Consumer: In order to effectively fight the issue of losing consumer base, the Company needs to close down or zoom into their specific customer base in order to target the ones who share the greatest potential (Gardasu and Babu 2017). For example, this product should be exclusively targeted for customers, who have a busy life schedule and essentially requires nutritious fast foods for their survival(Murphy and Dweck 2016). As an alternative or supplementary to slow foods, the Company provides alternative fast foods, rich in minerals—and this needs to be elevated even more.
• Promotion- The Company needs to bring about innovative promotional ideas that would emphasize and elaborate the Company’s main objectives. Various awareness and sensitization programs regarding good health and healthy eating habits must be taken up as organizational ventures in order to encourage consumers towards a healthy and sustainable eating and drinking practices(Tibon and Edralin 2016). The Company needs to focus more on their unique objectives related to environmental and public health to attract new customers, who now prefer sustainable and healthy products over cheaper products.

Conclusion 

To conclude, the psychology of marketing practices depend greatly on the target consumers of a Company and their changing behavior. If an organization has consumer-satisfaction as their main motto, it is important to recognize their particular demands and expectations from the Company’s products, which need to be incorporated in the finished goods in order to assure fulfillment or satisfaction. This paper aimed to investigate the various marketing processes of the organization in order to critically analyze them and compare with the previously conducted customer-survey.

The particular shortcomings identified by the critical analysis of Denone’s marketing strategies and marketing mix, compared with the particular consumer expectations derived from the conducted survey, it can be identified that the most prominent shortcoming of the organization is its high pricing of products. The price of the products was much more than their perceived value. Therefore, as a recommended strategy, the Company must strive to focus on their uniqueness and quality in order to retain their customers’ loyalty, even in the face of stiff competition. Hence, consumer behavior can be considered one of the vital elements in the structuring of marketing psychology.

References

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Dosé, T. and Åström, A., 2017. The Taco Theory:-A repeated measurement study of the effects of experiential event marketing on brand relationship quality in the FMCG industry.

Gardasu, S. and Babu, J.P., 2017. A STUDY ON THE BEHAVIOUR OF RURAL CONSUMERS TOWARDS FMCG PRODUCTS. HUMAN RESOURCE MANAGEMENT: NEW HORIZONS, p.71.

Grew, R., 2018. Food in global history. Routledge.

Haw, A.F., 2017. Comparing the implementation of sustainability initiatives in national and multinational fast moving consumer goods companies (Doctoral dissertation).

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