Term Paper on "Consumer Behaviour Final Exam Q1) in 2007"

Term Paper 8 pages (3304 words) Sources: 0

[EXCERPT] . . . .

Consumer Behaviour Final Exam

Q1) In 2007 Rocky Mountain Bicycles signed on as the bike sponsor for the

Tran Rockies Challenge.

(http://www.bikes.com/news/articles.aspx?lang=en&id=199) (Rocky Mountain

Bicycles replaced the former sponsor DeVinci Bicycles from Quebec. Why do

the TransRockies Challenge organizers seek sponsors like Rocky Mountain

Bicycles? Why does Rocky Mountain Bicycles sponsor events like the

TransRockies Challenge? Logo source: http://www.transrockies.com

Rocky Mountain Bicycles' interest in sponsoring the TransRockies Challenge

is to actively promote their bicycles, accessories and also underscore

their brand as being road-tested and sturdy, reliable and trustworthy

enough for such an ardous offroad bicycle. TransRockies Challenge's

managers and organizers are looking for entrants for their race, and also

funds for underwriting the cost of the event. In exchange for being listed

as a sponsor, Rocky Mountain Bicycles will need to pay a fee that will help

to pay the cost of event, and in exchange get significant branding

opportunities on the events' website, in addition to all materials

produced. TransRockies Challenge also looks to create credibility for

itself in the biking community by partnering with Rocky Mountain Bicycles

as well. The reasons for TransRockies Challenge and Rocky Mountain

Bicycles creating a series of reciprocal opportunities for each other is to

create the foundation of a successful business development and branding

partnership. Each of these organizations benefit from each others'

influence in the off-road biking industry and both will benefit in the

short- and long-run from partnering with one another for the event.

Q2) Apple, and its products evoke unmatched positive reactions from

hardcore fans? One, Nick Haley, went so far as to create his own ad for the

iPod Touch. (http://www.youtube.com/watch?v=KKQUZPqDZb0) Apple was so

impressed that the company's advertising agency contacted Nick to do a more

polished version of the ad.

(http://www.youtube.com/watch?v=dIttOsrKdBE&feature=related) What can other

companies do to try and create this sort of intense bond with their

consumers? What risks are there in such a strategy?

Apple's reputation for having the most devoted and loyal customers emanates

from the company's ability to sustain the message of its brand as

supporting creativity, nonconformity and individual independence. As a

result there are millions of very loyal Apple customers globally, many of

which create their own versions of advertisements as the video Nick Haley

created shows. The Apple customer base has also been called the "cult of

Apple" for their extreme level of dedication and loyalty to the brand.

Apple has been very successful in getting its customers to make

identification with their brand part of their customers' way of defining

themselves. When consumers identify so strongly with a brand, they

inevitably start to produce their own creative content to illustrate their

enthusiasm and loyalty while at the same time celebrating the brand's

meaning to them. The risks in creating customers who are so cultish in

their dedication and adoration of a brand is that it can be alienating to

new customers trying to be won over. This is certainly the case with the

challenges Apple has had moving into the enterprise computing markets where

IBM PC and compatible PCs and their published standards make enterprise

integration of these systems much easier than with Apple. A large part of

the branding challenge for Apple is to attract new customers without

alienating the devout followers of the brand. The greatest risk of all is

not being able to attract new customers by relying on the brand to purely

support and reinforce extreme loyalty on the part of long-time customers.

Q3) Concern about the environment is not new. From the 1962 publishing of

Rachel Carson's book "Silent Spring" to Al Gore's crusade against global

warming, there has been strong interest in the issues raised by

environmentalists. While virtually all energy conservation measures will

pay for themselves, often over a very short period of time, many consumers

take a short term approach and fail to invest in these technologies. Some

governments have offered financial incentives for consumers to "do the

right thing" and install more energy efficient appliances etc. Why do

consumers, and organizations, need incentives to put actions in place that

will save them money, and help "save the planet"?

There are many factors as to why consumers fail to act rationally and save

both the planet's limited resources in addition to gaining financial

savings for themselves, and several of them are discussed in this paper.

First, loyalty to brands and the trust inherent in that loyalty are not

easily displaced, even with financial incentives associated with them.

This is the primary reason why getting consumer sot change from one brand

to another is so difficult. Changing from one form of transportation to

another, even with incentives, is difficult for most people to transition

to, as the brand and the habit of how it is consumed are not easily broken.

There's also the issue of cognitive dissonance immediately after trying a

new brand, or in the case of environment, any new approach to any part of a

persons' life will need to be proven just as good or better in terms of

quality, reliability and trust compared to the previous habit. Take for

example the use of energy-efficient light bulbs in a home. These bulbs are

more expensive yet in the pong-run save thousands of hours of electricity

and can also drop the monthly electricity bill of the consumers choosing to

use them. Yet, they are new, and in the minds of many consumers, unproven,

and lack trust on the part of consumers limits their adoption. As a

result, they may be used once and if they are marginal in performance or

not to the expectations to consumers, they will be not used again,

regardless of the environmental and ecological implications. The aspect of

materialism also influences the consumption patterns of consumers, and

while it is increasingly obvious that driving a large Sports Utility

Vehicle (SUV) like a Cadillac Escalade will cost more than $150 per fill-up

when gas is $3.50 a gallon, consumers continue to purchase them, mainly to

make a statement of their wealth (or lack of it after purchasing one of

these). Despite the many incentives of driving more fuel efficient cars

that include the obvious economics of spending less on gas, and in many

countries preferential traffic lanes (as in California hybrid vehicles can

use the High Occupancy Vehicle lanes), and even tax breaks, people resist

downsizing their vehicles when it makes clear economic sense to do so.

There are many other reasons for consumers not embracing change, yet the

bottom line is that between loyalty, what purchasing products think people

say about who they are, and trust in brands all conspire to make changing

consumer behaviour to support a more environmentally friendly lifestyle all

the more difficult.

Q4) People working in service industry jobs feel underpaid and

unappreciated. They get all of the blame when things behind the scenes go

wrong and none of the thanks when they go right. This example from some

rather angry Qantas passenger (See below.) is one of the more recent

examples. Why are so many consumers so grumpy? What can retailers, and

other service providers do to help keep their customers happy?

Consumers are dissatisfied with the level of service they are receiving

because the majority of companies hire customer service representatives

that want a job yet don't want to necessarily work in customer-facing

roles. There is a major mismatch in many peoples' backgrounds and

interests relative to the responsibilities they perform in their jobs. The

second factor is that the majority of companies don't offer a training

program to help customer service representatives to become more effective

in managing customer complaints and delivering exceptional customer

service. Thirdly, many company's cultures see service as a necessary evil,

and this attitude inevitably percolates down to service workers on the

front line with customers, who see their jobs as dead-end, not really

important in the companies they work for. Fourth, there has been a

continual erosion in the quality of customer service for all these factors

and the fact that exceptional service is rarely if ever rewarded in many

companies, so it doesn't happen. Taking all the above factors into

account, it's easy to see why customers are so irritable and grumpy. They

have been increasingly been treated as the least important aspect of a

company's operations.

Retailers and any other type of company that has regular contact with

consumers needs to first create a culture that celebrates excellent

service. The reward systems in Marriott Corporation for example actively

encourage employees to step up and deliver exceptional service, as does the

culture of Nordstrom's Department Stores located throughout the Pacific

Northwest and western United States. It is common for a Nordstrom's

employee to go to extraordinary lengths to delight a customer. There also

needs to be a more intelligent approach to assigning workers to customer-

facing service and support jobs. Personality tests and personal aptitude

assessment tests should be given to employees before they are placed in

these roles. Companies who want to continually… READ MORE

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