Buying in on anti-consumption - How companies in the convenience goods market can develop an appropriate marketing mix targeted at general anti-consumers BACHELOR THESIS May, 2013 AUTHOR Nicolai Lund Nygaard Pedersen Student ID: XXXXXX SUPERVISOR Louise Genefke BA DEGREE IN Marketing and Management Communication Aarhus University, Business and Social Sciences TOTAL NUMBER OF CHARACTERS EXCL. BLANKS: 54,910 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Abstract Anti-consumption is gaining footing as a significant trend of consumer behaviour throughout the international market. It is simply characterised by being against consumption, and stems from ordinary people becoming tired of mass-production and excessive marketing, and therefore they increasingly purchase only what is needed. Those people are by literature in the field termed anticonsumers. Anti-consumers have different purpose and practices, and this thesis concerns general anti-consumers, who are against general consumption for personal or societal/environmental reasons. If companies do not address this segment’s reason for buying and not buying they are committing long-term strategic mistakes. This thesis continues a path initiated by previous research within the field, which regards the development of products that appeal to the anti-consumer. However, in order to limit the scope of research problem, the thesis only addresses how companies in the convenience goods market can develop an appropriate marketing mix targeted at general anti-consumers. The thesis will revolve around and take departure in the proposed problem statement: What are the general anticonsumer’s preferences when buying convenience goods, and how can companies in the convenience goods market develop an appropriate marketing mix targeted at the general anticonsumer? In order to answer the problem statement, the thesis adopts a behaviourist perspective on the research by not giving much attention to the actual mental process but merely the stimulus-response relationship. With the use of the epistemological view of Social Constructionism on the empirical data gathering and results, and the methodology of deduction within Positivism, the thesis researches the preferences of general anti-consumers. The method used is a triangulation of marketing research methods, comprised of both quantitative and qualitative measures to gather data in order to show general tendencies combined with elaborative reasoning of the respondents. 46 valid responses were collected and the findings show that the respondents’ preferences of convenience goods attributes generally are quality and low price. Furthermore, the findings show that the respondents prefer experiential information sources in the information search process and their preferred place of shopping is supermarkets. When arguing for their preferences, in general, the respondents find price, quality and general convenience of high importance, because the saved expenses and time connected with these benefits can contribute in practicing general anticonsumption elsewhere. These findings are supported by literature on anti-consumers (Iyer and Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Muncy (2009), Black and Cherrier (2010) and Dobscha (1998)), which claims that anti-consumers value functional benefits of consumer goods, as it gives the opportunity to practice anticonsumption in more valuable ways. With the use of literature from the field of marketing and consumer behaviour (Primarily: Peter and Olson (2005), Kotler et al. (2009), Jobber (2010) and Solomon et al. (2010)), the thesis suggest that the focus of the marketers should be on finding the right balance between low price and quality through a value-based approach and/or a product-based approach to quality. The pricing objective should be to support this quality/price relationship by product-quality leadership through the means of value pricing, more specifically, everyday low pricing methods. In terms of place suggestions, the suggested distributions strategies include supermarkets as retailers and maximum of 2-level channels to decrease expenses and ensure a low product price. Promotional suggestions include establishing brand awareness and brand-purchase intention by highlighting the points of difference of the products in question. More specifically, the marketers should promote products based on functional benefits for instance via in-store sales promotion such as sampling. The thesis recognises that many decisions regarding the marketing mix development are company and product specific; thus, the actual success of a product or brand relies on a myriad of marketing decisions. Therefore, the suggested and presented strategies should be considered guidelines or a framework rather than a specific solution. Keywords: Anti-consumption, general anti-consumers, convenience goods, preferences, consumer behaviour, consumer decision-making, marketing mix strategy, marketing research, behaviourist perspective, Total number of characters in Abstract excl. blanks: 3,699 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Table of Contents 1. INTRODUCTION ..................................................................................................................................................... 1 1.1 PROBLEM STATEMENT ........................................................................................................................................................... 2 1.2 DELIMITATIONS ........................................................................................................................................................................ 3 1.3 DEFINITIONS IN RELATION TO THE PROBLEM STATEMENT ............................................................................................. 4 1.3.1 Convenience goods .......................................................................................................................................................... 4 1.3.2 Preferences .......................................................................................................................................................................... 4 1.3.3 General anti-‐consumer .................................................................................................................................................. 4 2. METHOD .................................................................................................................................................................. 6 2.1 SCIENTIFIC APPROACH ............................................................................................................................................................ 6 2.2 EMPIRICAL DATA ...................................................................................................................................................................... 7 2.2.1 Primary data ...................................................................................................................................................................... 7 2.2.2 Secondary data .............................................................................................................................................................. 10 2.3 CHOICE OF THEORY ............................................................................................................................................................... 10 2.4 STRUCTURE OF THESIS ......................................................................................................................................................... 11 3. THEORETICAL FRAMEWORK .......................................................................................................................... 13 3.1 ANTI-‐CONSUMPTION ............................................................................................................................................................ 13 3.2 FOUR TYPES OF ANTI-‐CONSUMERS .................................................................................................................................... 13 3.2.1 Simplifiers ......................................................................................................................................................................... 14 3.2.2 Anti-‐loyal consumers ................................................................................................................................................... 14 3.2.3 Global impact consumers .......................................................................................................................................... 14 3.2.4 Market activists ............................................................................................................................................................. 15 3.3 CONSUMER DECISION-‐MAKING PROCESS .......................................................................................................................... 15 3.3.1 Problem Recognition ................................................................................................................................................... 16 3.3.2. Search for alternative solutions ............................................................................................................................ 16 3.3.3 Evaluation of alternatives ......................................................................................................................................... 17 3.3.4 Purchase ............................................................................................................................................................................ 17 3.3.5 Postpurchase use and re-‐evaluation of chosen alternatives ...................................................................... 18 3.4 MARKETING MIX .................................................................................................................................................................... 18 3.4.1 Product .............................................................................................................................................................................. 18 3.4.2 Price .................................................................................................................................................................................... 18 3.4.3 Place .................................................................................................................................................................................... 19 3.4.4 Promotion ......................................................................................................................................................................... 19 4. FINDINGS AND ANALYSIS ................................................................................................................................. 21 4.1 TYPES OF GENERAL ANTI-‐CONSUMERS ............................................................................................................................. 21 4.2 PLACE OF SHOPPING ............................................................................................................................................................. 22 4.3 INFORMATION SOURCE ......................................................................................................................................................... 23 4.4 FREQUENCY OF BUYING ....................................................................................................................................................... 24 4.5 PREFERENCES OF IMPULSE CONVENIENCE GOODS .......................................................................................................... 25 4.6 PREFERENCES OF STAPLE CONVENIENCE GOODS ............................................................................................................ 27 5. SUGGESTIONS ON THE RIGHT MARKETING MIX STRATEGIES ............................................................ 29 5.1 PRODUCT ................................................................................................................................................................................ 29 5.2 PRICE ....................................................................................................................................................................................... 30 5.3 PLACE ...................................................................................................................................................................................... 31 5.4 PROMOTION ........................................................................................................................................................................... 32 5. CONCLUSION ......................................................................................................................................................... 35 REFERENCES ............................................................................................................................................................. 37 APPENDIX 1 – QUESTIONNAIRE DESIGN ......................................................................................................... 39 APPENDIX 2 – QUESTIONNAIRE RESULTS ...................................................................................................... 47 Nicolai Lund Nygaard Pedersen Student ID: 301362 May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 1. Introduction Ever since the emergence of mass-consumption societies in the 18th century, anticonsumption has existed as opposition to the over-consumption and materialism that the cultural and economic development has brought along (Humphery, 2010). Anti-consumption is simply characterised by being against consumption (Lee & Fernandez, 2009). Anticonsumption accelerated during the counterculture of the 1960s, and it has emerged as a resistance to the Western world’s materialism and overconsumption and its consequences (Humphery, 2010; Bech-Jessen & Vaaben, 2010). Choi (2011) states as reason for this development that, “the contemporary expansion of mass production and marketing has slowly given rise to a backlash, the “anti-consumption” movement” (p. 117). The result is that ordinary people “are becoming tired of mass-production and excessive marketing” (Choi, 2011 p. 117) and therefore they are, “increasingly purchasing only what is needed” (Choi, 2011, p. 117). In general, however, anti-‐consumption has moved from being a “minor stream of niche consumers” (Choi, 2011, p. 117) to “becoming a major trend in the overall market” (Choi, 2011, p. 117). Therefore, this segment suddenly constitutes a significant, large segment of the population, which therefore must not be overlooked when investigating consumers’ behaviour. From a business perspective, this development, anti-consumption, might at first glance seem as a possible threat to the existence of some companies in their current form - people buy less, companies earn less – however, although it seems contradictory, anti-consumption is big business, companies just need to know how to make products and services attractive to anticonsumers (Bech-Jessen & Vaaben, 2010). According to Dobscha (1998) ignoring this type of people is a long-term strategic mistake. If companies succeed in understanding the anticonsumer and their reasoning for buying and not buying, this can shed light on the unexploited opportunities of this segment and result in mutual benefit. The thesis will continue a path, which current research on anti-consumption has initiated: “Are there ways to develop products that will appeal to such consumers [anti-consumers], or can existing products be re-designed to meet these consumers' needs?” (Iyer & Muncy, 2009, p. 166). Therefore, the primary purpose of the thesis is to propose marketing mix strategies for companies in the convenience goods market that can help in targeting general anticonsumers. In order to reach an answer to this, the thesis will furthermore study general antiPage 1 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis consumers preferences when purchasing convenience goods. These behavioural patterns have yet to be studied. Understanding the consumer’s preferences is paramount from a company’s marketing perspective in order to exploit the sales opportunities of a given segment (Kotler, Keller, Brady, Goodman, & Hansen, 2009). 1.1 Problem Statement In regards to the definition of the problem and the purpose of the thesis, the following problem statement has been formulated. This problem statement will serve as the main aim of the thesis: What are the general anti-consumer’s preferences when buying convenience goods, and how can companies in the convenience goods market develop an appropriate marketing mix targeted at the general anti-consumer? Page 2 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 1.2 Delimitations It is important to stress that this thesis does not conduct anti-consumption research, but rather regular consumer behaviour research of anti-consumers. The main difference is that anticonsumption research deals with the very key component of anti-consumption – that is, the refusal and avoidance of general buying (Lee & Fernandez, 2009). This thesis, on the other hand, assumes that (some or the majority of) anti-consumers do buy standard goods regularly and therefore go through a decision-making process similar to standard consumers, which is object to research and can be used for marketing purposes. Another delimitation is the investigated segment. This thesis only studies the behaviours of what Iyer and Muncy (2009) describes as consumers with general anti-consumption behaviours. This type of anti-consumption is based on different preferences, but is targeted towards all sorts of consumer goods. The other part of anti-consumers is represented as people who deliberately refuse to buy specific brands for different, individual reasons, thus called specific anti-consumption (Iyer & Muncy, 2009). Therefore, researching the preferences of the latter segment would show no general tendencies as the reason would vary from person to person, and this segment is therefore not object to any generalised suggestions regarding marketing strategies. The general anti-consumers, however, practice general anti-consumption towards all types of consumption, which makes this group object to the study of general tendencies. Furthermore, this thesis recognises that differences between cultures and nationalities may be present in this context. However, Choi (2011) states, “The Consumption fatigue and preference for a simple life first appeared among high-income earners in advanced markets. Now, however, they are spreading to the consumers in emerging markets. This trend is also evident in Korea.” (p. 117), therefore, anti-consumption is not of geographic and/or cultural limitation, and therefore a possible cultural dimension will not be accounted for in the thesis. Page 3 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 1.3 Definitions in relation to the problem statement 1.3.1 Convenience goods Convenience goods is a definition that classifies consumer goods based on shopping habits (Kotler et al., 2009). Convenience goods are those goods that are purchased “frequently, immediately, and with a minimum effort” (Kotler et al., 2009, p. 508). Furthermore, convenience goods can be further segmented into staple and impulse goods. Staple convenience goods are bought regularly and are considered necessities. Examples are meat, vegetables, dairy products, etc. Impulse convenience goods are usually bought impulsively and without prior planning, such as confectionary, magazines, some beauty products, etc. Convenience goods are chosen as research object, because it is an umbrella definition of several different types of consumer goods that are purchased regularly. However, the behaviour of anti-consumers in relation to convenience goods buying has yet to be studied. 1.3.2 Preferences The thesis’ research is general anti-consumer’s preferences when buying convenience goods. In this context, the term preferences indicates the determinant attributes that are regarded as most important and which have highest influence on a possible, subsequent purchase decision. Determinant attributes are defined by Solomon, Bamossy, Askegaard, & Hogg (2010) as the features of a brand or product that are used to differentiate a core product from equivalent brands or products. Thus, determinant attributes constitute what is called evaluative criteria, which are “the dimensions we use to judge the merits of competing options” (Solomon et al., 2010, p. 337). This thesis also investigates the general anti-consumers preferences regarding shopping place and information search in order to gather knowledge on all aspects of the marketing mix. In order to avoid misinterpretations and misunderstandings, the marketing mix determinants of most importance to the general anti-consumers will subsequently be referred to as preferences, as these are the objects of research in the thesis. 1.3.3 General anti-‐consumer According to Iyer and Muncy (2009), there exist “many different approaches to anticonsumption and alternate consumption and the motivations for anti-consumption vary among political, personal, and environmental concerns” (p. 160). This thesis will only revolve around anti-consumers who are categorised by a general refusal towards all consumption, hence termed general anti-consumsers (Iyer & Muncy, 2009). General anti- Page 4 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis consumers comprise of simplifiers and global impact consumers (Iyer & Muncy, 2009), which are distinguished between throughout the thesis. A further elaborative explanation of anti-consumption and the anti-consumer is presented in the theoretical framework section. Page 5 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 2. Method This section describes the method that the thesis uses in order to answer the problem statement. This regards first of all the scientific approach, the empirical data chosen and data gathering methods, a theoretical discussion and the structure of thesis. 2.1 Scientific approach Due to the nature of this thesis, there is no single, prevalent scientific approach but rather elements of several different perspectives are used in order to provide a valid answer to the problem statement. Ontologically, the scientific approach adopted is Critical Rationalism, which claims that the world consists of measurable facts that can be used as basis for scientific knowledge (Burr, 2001). The thesis will be studying general anti-consumers’ behaviour by use of empirical data, and therefore recognises that such phenomenon can be measured by means of data gathering. The thesis adopts a behaviourist perspective in its view on consumer behaviour, which focuses on the impact of external influences on the behaviour of the consumer. Solomon et al. (2010) describes this perspective as the S (Stimuli)-R (response) approach, as not much attention is given to the complex mental processes. The purpose is to know what marketing mix determinants increase the chances of purchase action from general anti-consumers. This is an operant conditioning view on consumer behaviour, as the consumer has learned “to perform behaviours that produce positive outcomes and to avoid those that yield negative outcomes” (Solomon et al., 2010, p. 248). Some determinants will inevitably either trigger a positive or negative outcome, and this thesis will investigate which produce a positive outcome. The mental processes are not of object to this thesis, as it is enough to recognise the element of operant conditioning called positive reinforcement, which is “when the environment provides positive reinforcement in the form of a reward, the response is strengthened, and appropriate behaviour is learned” (Solomon et al., 2010, p. 249). This part of the stimulus-response of purchase behaviour is enough to base basic marketing mix decisions on, by investigating the reward of buying convenience goods. Regarding the methodology that is used, the scientific approach adopted is Positivism, which generally considers induction the approach for establishing laws and theories (Chalmers, 2008). Induction is based on quantitative generalization and causal generalisation, which means that generalisations can be inferred from finite number of observations, and a Page 6 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis conclusion on relations between events can be inferred from a finite number of observations – thus, laws and theory can be derived from observations about a phenomenon (Chalmers, 2008). The findings (observations) of the research in this thesis are used in order to find answers (quantitative/causal generalisation) to the problem statement, which resembles the methodology of induction. However, Positivism claims that the objective truth can be reached through this methodology. This thesis recognises that the truth can never be reached fully; hence, laws and theories are just the best available knowledge that has yet to be falsified. The concept of Falsificationism belongs to Critical Rationalism (Burr, 2001), which therefore constitutes this thesis’ view on the results that are provided. A generalisation based upon the findings can be made, but the ‘truth’ is not obtainable. Therefore, the result of this thesis is considered the best available explanation to the investigated problem, but not considered the definitive truth, which therefore makes the results of this thesis object to further deductive falsification/validation. 2.2 Empirical data 2.2.1 Primary data In order to answer the problem statement, the thesis will shed light on the general anticonsumers’ preferences when buying convenience goods – what are the determinants that trigger a purchase action. In accordance with the scientific methodology, the thesis will therefore make use of observations – in this case empirical data. The empirical data of this thesis will be gathered by means of marketing research, which job it is to “produce insight into the consumer’s attitudes and buying behaviour” (Kotler et al., 2009, p. 190). According to Kotler et al. (2009), effective marketing research follows six steps, which this thesis’ research is based on. The six steps are: defining the problem and research objectives, develop the research plan, collect information, analyse the information, present the findings, and make the decision (Kotler et al., 2009). This process is employed throughout the research of this thesis. The research gathers primary data, which is data that is “freshly gathered for a specific purpose of for a specific research project” (Kotler et al., 2009, p. 193). Primary data constitutes the basis for knowing how general anti-consumers behave and why do they do this. No contemporary secondary data is available that specifically addresses this part of the problem statement hence primary data need to be collected. The research approach chosen takes form of survey research, which can be used to “learn about people’s knowledge, beliefs, preferences, and satisfaction” (Kotler et al., 2009, p. 197). Page 7 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Having already stated that the thesis will investigate the preferences of general anticonsumers, the survey approach is considered the most appropriate approach, and will thus take form of a questionnaire, which can provide primarily quantitative data. Quantitative research data, Denscombe (1999) states, “conveys a sense of solid, objective research” (p. 177). The findings can be presented in the form of graphs and tables because of the data being measurable. Therefore, quantitative data is appropriate in this thesis, as the research is looking for generalised answers to a measurable question, which such data can provide. However, the questions will also feature qualitative data in the form of questions regarding the reason why general anti-consumers choose as they do. Frey, Botan, Friedman and Kreps (2009) state “Quantitative observations provide a high level of measurement precision and statistical power, while qualitative observations provide greater depth of information about how people perceive events in the context of the actual situations in which they occur” (p. 99). The use of both qualitative and quantitative data is a method called triangulation, which enhances the validity of the observations (Schrøder, 2001). Thus, the use of both methods will benefit the research with the forces of each in order to answer the research question and in order to argue for the right use of the marketing mix. The quantitative data is used in order to investigate the behaviour from a stimuli-response perspective, i.e. what factors that triggers the response of buying. The qualitative part of the questionnaire consists of elaborative, open questions (Kotler et al., 2009) to explain further why the respondents prefer some attributes to others. Thus, the qualitative data will serve as the link between what the consumers prefer, why this is the case, and how this corresponds to their motives and purposes of anticonsumption from a behaviourist perspective. In order to gather data of general anti-consumers, contact to respondents representing the two types of general anti-consumers, simplifiers and global impact consumers, is facilitated through online communities. This sampling unit represents a judgement sample, where the researcher selects a population/target group, which are considered to be able deliver accurate information on the topic (Kotler et al., 2009). Therefore, in terms of the global impact consumers, Reddit.com is chosen as platform for distribution of the surveys. Reddit.com is an online community where users vote on content that other users upload within different interest areas (Reddit, 2013). Reddit.com has been chosen as global impact consumers often have environment and climate concerns (Iyer & Muncy, 2009), and Reddit.com features a subpage, which revolves around this. Reddit.com gives the opportunity for everyone to participate in Page 8 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis the discussions and post content – hence, the questionnaire can be distributed through this community. To gather data from simplifiers, the online community, selfsufficientish.com has been chosen. This is an online guide for everyone with an interest in self-sufficiency (Selfsufficientish, 2013). The page also features a forum, thus an appropriate distribution channel in order to target simplifiers as they believe in living a simpler life (Iyer & Muncy, 2009) e.g. through self-sufficiency. In order to identify general anti-consumers, the respondents are first off asked whether they believe in decreasing their general consumption on a daily basis. This is a closed question, which is a question with a predefined answer (Kotler et al., 2009). Doing this, respondents without general anti-consumer motives can be excluded in the findings, as these answers are considered invalid. Furthermore, a question is created to indirectly identify what type of anticonsumer the respondent can be classified as in order to distinguish between simplifiers and global impact consumers. This question is also a closed question where the respondents are presented to five statements based on Iyer and Muncy’s (2009) description of simplifiers’ and global impact consumers’ motives for practicing anti-consumption. However, to not exclude respondents with with other general anti-consumption motives than those presented by Iyer and Muncy, the respondents are given the opportunity to state other motives if the ones predefined do not fully resemble their motive. The next part of the questionnaire constitutes questions regarding relevant aspects of the marketing mix. First off, a question regarding from where the respondents gather information about convenience goods is presented, and questions regarding the frequency of convenience goods buying. These questions are chosen in order argue for suggestions on promotion and place strategies (Kotler et al., 2009; Jobber, 2010). Next, respondents are asked to rate different attributes of convenience goods products in order of importance to their decision of buying. The questions are based on a rank-order method where consumers rank each preference in regards to the level of importance to their decision of buying (Kotler et al., 2009). The rating scale used is a five-point Likert scale, which makes it possible to calculate averages (Allen & Seaman, 2007). The scale ranks from high importance to low importance regarding each attribute. This method is chosen to show to what extent consumers prefer some attributes to others, which can be used to base strategic suggestions regarding product and price on (Kotler et al., 2009). The stated attributes of convenience goods products are based on Kotler and Armstrong’s (2010) elements of the marketing mix: low price, organic, Page 9 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis packaging, quality, healthy, country of origin, location of buying, brand’s reputation, and the level of social responsibility of company. These specific elements are chosen as they can be applied to all convenience goods. For instance, ‘taste’ is not chosen as it only applies as attribute of foods, whereas ‘low price’ can be applied to both staple and impulse convenience goods. However, respondents have been given the opportunity to specify other determinants if relevant. Furthermore, respondents are asked to state why they find specific attributes important. These questions are based on qualitative research techniques, and will be used when arguing for the right strategy in connection to the marketing mix. 2.2.2 Secondary data Together with the primary data, secondary data will serve as further explanation in terms of general anti-consumers reason for valuing the preferences that they do. Secondary data is defined by Kotler et al. (2009) as,“data that were collected for another purpose and already exists somewhere” (p. 193). The secondary data will therefore contribute to the argumentation on what the appropriate marketing mix strategy is in terms of the general anti-consumers. This data will consist of research articles regarding anti-consumers and their behaviour: Iyer and Muncy (2009), Black and Cherrier (2010) and Dobscha (1998). These articles will serve as primary secondary data to argue for the strategies to choose. 2.3 Choice of theory The problem that this thesis studies and proposes solutions to is situated within the field of consumer behaviour and marketing. Thus, the primary theory that is used in this thesis concerns relevant concepts within these fields. In explaining the consumer decision-making process, several sources will be used. There is a general agreement on the framework of this theory, however, there are also very different explanations on specific elements of the theory, hence, this thesis will use the appropriate elements regarding the relevant aspects of the theory from Peter and Olson (2005), Kotler et al. (2009), Jobber (2010) and Solomon et al. (2010). The same literature is also applied when the discussion on how companies can develop an appropriate marketing mix is presented. However, other sources are furthermore applied in this part of the thesis, as relevant theories and concepts exist outside the mentioned literature, e.g. Cravens, Holland, Lamb & Montcrief’s (1988) five quality definitions in order to determine the right quality approach, and Pickton and Broderick’s (2005) promotional strategies. Moreover, despite the prevalent stimulus-response perspective of this thesis, the thesis also recognises the need for some analysis of reasons behind the respondents’ answers. Page 10 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Therefore, the literature of Iyer and Muncy (2009), Black and Cherrier (2010), Dobscha (1998), and Maslow’s behavioural needs theory (Solomon et al., 2010) is used where applicable in order to argue why the general anti-consumers choose as they do. 2.4 Structure of thesis The structure of the thesis is follows basic structuring of research papers, and is furthermore to some extent based on Bloom’s taxonomy (Reinecker and Jørgensen, 2012). This means that, in order to answer the problem statement, the thesis develops through the required steps of a scientific paper. The thesis explains the theory, knowledge and literature behind the topic; in order to understand and investigate the problem, it identifies behaviours by means of empirical data gathering, which is analysed in order to apply this knowledge in the presentation of suggested strategies. This is accordance with the general frame of Bloom’s taxonomy (Reinecker and Jørgensen, 2012). To give a visual overview of thesis’ structure, Figure 1 shows the correlation between the different text parts: Page 11 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Fig. 1: Structure of the thesis Page 12 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 3. Theoretical framework 3.1 Anti-‐consumption Anti-consumption literally means against consumption and is a trend, which focuses on the act of not buying instead of buying (Lee & Fernandez, 2009). Today’s consumers live in a world, where they can buy anything if they have the money, and companies use a vast array of techniques to exploit the consumers’ desire to buy. However, as opposition to consumption and the excessive production and marketing efforts, anti-consumption has arisen (Choi, 2011). People who practice anti-consumption are labelled anti-consumers, and their reasoning for avoiding or refusing consumption is often of psychological and social reasons rather than out of necessity (Choi, 2011). 3.2 Four types of anti-‐consumers In general, there is consistency in literature about the categorization of anti-consumption and anti-consumers. There is agreement on four types of anti-consumers, which refusal of buying stems from different motives and the actual anti-consumption takes form differently (Choi, 2011; Iyer & Muncy, 2009). The four types of anti-consumers are explained primarily with the use of Iyer and Muncy’s (2009) definitions (Table 1) but also Choi’s definitions are taken into consideration (2011). However, as Iyer and Muncy (2009) state, “It is important to note that these are not mutually exclusive categories in that a person could reduce consumption for more than one (or even all) of the reasons associated with each category.” (p. 160). Purpose of Anti-Consumption Object of Anti Consumption Societal Concerns Personal Concerns General (all consumption) Global impact consumers Simplifiers Specific (Individual Brands or Products) Market Activists Anti-loyal Consumers Table 1: Anti-‐consumer types (Iyer & Muncy, 2009, p. 161) Page 13 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 3.2.1 Simplifiers The first category of anti-consumption is what Iyer and Muncy (2009) call simplifiers (also referred to in literature as Voluntary Simplifiers (Kaynak & Eksi, 2011; Etzioni, 1998). This type of anti-consumption is based on personal motives for practicing general anticonsumption. According to Iyer and Muncy (2009), “this group wishes to drop out of the fastpaced, high-consumption society and move to a simpler, less consumer- oriented lifestyle” (p. 161). Furthermore, the simplifiers “believe that maximizing their consumption, as is commonly done, has undesirable consequences, such as stress and distraction from higher pursuits” (Iyer & Muncy, 2009, p. 161). In general, this kind of anti-consumption is based on personal motives. Choi (2011) calls this type of anti-consumption fatigue anti-consumption, and describes this kind of anti-consumption as a result of information overload from marketing of products and services, which causes people to feel fatigue and stressed. As a consequence, they start to value the other things in life rather than materialistic consumption, thus prioritising acts and behaviour with a self-realization or spiritual purpose (Choi, 2011). 3.2.2 Anti-‐loyal consumers Anti-loyal consumers practice anti-consumption towards a specific brand based on personal experience with this brand (Iyer & Muncy, 2009) – also called anti-loyalty. According to Iyer and Muncy (2009), “Anti-loyalty reflects a personal commitment to avoid purchasing a product because of perceived inferiority or because of a negative experience associated with it” (p. 162). This motive may stem from a bad, first-hand experience with a product, which is also the definition that Choi (2011) gives this category of anti-consumption that she terms trauma anti-consumption. As a result of the bad experience, the specific product/service or brand is subsequently “blacklisted” by the consumer; hence, the consumer will refuse to buy this specific product/service again. 3.2.3 Global impact consumers The global impact consumers are interested in a reduction of general consumption in order to benefit the society – mainly due to an environmental concern and/or to reduce material inequality (Iyer & Muncy, 2009). More specifically, according to Iyer and Muncy, the global impact consumer “hold the belief that the modern consumption of current times is causing irreparable damage to the earth's ecosystem or that over-consumption by the wealthier nations or classes is contributing to poverty problems in lesser developed nations or the poorer classes of society.” (p. 161). This defintion is also reflected in Choi’s (2011) Page 14 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis description of what she defines as the enlightment anti-consumption. She states that it is aimed at social and environmental issues, and, furthermore, that this type of anti-consumption has seen a rapid growth, especially facilitated through the Internet, via blogs and social media (Choi, 2011). However, Choi claims that enlightenment anti-consumption need not be of activist nature but can be of a small engagement in larger events/initiatives. One example is the WWF initiative Earth Hour where all people throughout the world are encouraged to turn off the light in their homes one hour at night, the same day, in order to increase the awareness of climate and environmental issues (Dahlager, 2008). 3.2.4 Market activists The market activist aims anti-consumption at a specific brand but due to a societal concern (Iyer & Muncy, 2009). Iyer and Muncy state, “Market Activists might avoid using a product or brand because they feel that a specific brand or product causes a specific societal problem.” (p. 162). One example is the boycott of the sportswear brand Nike as a consequence of several incidents of poor workers’ rights in the so-called Nike Sweatshops in Asia (Birch, 2012). As already stated, due to the complexity of specific anti-consumption, that is, the anticonsumption targeted at specific brands and/or products (Iyer & Muncy, 2009), this type of anti-consumer is not an object of this thesis. The thesis only concerns general anti-consumers (global impact consumers and simplifiers (Iyer & Muncy, 2009). 3.3 Consumer decision-‐making process The action of purchasing a product/service includes several pre- and post stages to the actual purchase decision. In order to understand the behaviour of a specific consumer and in the context of this thesis, general anti-consumers, all these stages must be understood to know how the consumers actually make their buying decision. Marketing scholars have developed a model (Figure 2), which describes the purchase decision process. Page 15 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Problem Recognition Supervisor: Louise Genefke BA MMC – Bachelor Thesis Search for alternative solutions Evaluation of Alternatives Purchase Postpurchase use and reevaluation of chosen alternative Fig. 2: A Generic Model of Consumer Problem Solving (Peter & Olson, 2005, p. 165) The model consists of five stages involved in consumer decision-making, which will be explained below. 3.3.1 Problem Recognition The first stage of consumer decision-making is for the person to recognise a lack between one’s actual state and the ideal state (Solomon et al., 2010). For instance, a person finds out that he needs a way to transport him to his new job, which is far away from his home. The problem recognition may be aroused by either internal stimulus, such as hunger, thirst, sex, etc., or external stimulus, for example the admiration of another person’s clothing (Jobber, 2010). Marketers can have an influence on this stage of the problem, as marketing tools can be used in order to plant a problem/desire in the minds of consumers (Solomon et al., 2010). 3.3.2. Search for alternative solutions The second stage, information search, involves internal and external search. Not all consumers go through all five stages (Kotler et al., 2009), and the information search is often skipped, as not all decisions require information search. Some processes such as impulse Page 16 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis shopping are not object to information search. This can also be the case in regards to convenience goods shopping – the consumer does not always perceive the problem recognition as sufficiently strong, hence, one that requires prior information search. Kotler et al. (2009) distinguish between two levels of involvement in the search process. The first is heightened attention where the consumer becomes more receptive to information but does not involve in active information search. The other level, active information search, involves the consumer being actively engaged in information search. This level includes four information sources that the consumer turns to: personal, commercial, public and experiential (Kotler et al., 2009). 3.3.3 Evaluation of alternatives When consumers get to evaluating the alternatives, basically, they will pay most attention to the products/brands with the attributes that deliver the benefits that are sought to satisfy the consumers’ specific needs (Kotler et al., 2009). The consumer screens the attributes of different products/brands to produce an evoked set, which is mental grouping of the brands that the consumer finds attractive in connection to the desired attributes – the evoked set is the final brands/products that the consumer considers before deciding to purchase (Solomon et al., 2010). This stage also constitutes high-involvement and low-involvement situations (Jobber, 2010). In the high-involvement situation, the consumer is influenced by personal beliefs and attitudes, as well as the outside influences from society and other people. In low-involvement situations, such as habitual buying, there is very little conscious thought or formation of attitudes towards the alternatives that are evaluated (Jobber, 2010). 3.3.4 Purchase The actual purchase decision is executed in this stage. According to Kotler et al. (2009), at this stage, the consumer makes up to five sub-decisions regarding: choice of brand, which dealer to purchase from, the quantity, the timing of the purchase and payment method used. In choosing the brand/product, the consumer makes use of evaluative criteria that are dimension, which can be used to judge competing options (Kotler et al., 2009). In choosing between different milk-brands the evaluation criteria are all the features that the brands have in common such as packaging, price, fat-level, shelf life, etc. The determinant attributes are the features that a consumer values highest and thus will be basing the product decision on Page 17 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis (Solomon et al., 2010). The determinant attributes vary from person to person in the decision process – some may favour price over quality, others the company reputation over all other features. 3.3.5 Postpurchase use and re-‐evaluation of chosen alternatives The last stage involves the processes and actions that happen after the purchase. The consumer will evaluate the purchase in relation to whether the expectations have been fulfilled or not, and therefore act on the basis of this evaluation (Kotler et al., 2009). The postpurchase behaviour can take form in keeping the product or getting rid of it temporarily or permanently. 3.4 Marketing mix A company develops its marketing mix based on the knowledge and understanding of the target customer in order to exploit the possibilities of turnover from this target group. The marketing mix consists of four aspects called the 4 P’s, which constitutes four decision areas that companies have to manage to differentiate from other companies (Jobber, 2010). Each of the 4 P’s are explained below primarily based on Jobber’s (2010) definition, and a model (Figure 3) is presented to summarise the marketing mix based on Kotler and Armstrong’s (2010) definition of the concept. Based on the empirical data, the appropriate strategy within each category will be discussed later in the thesis in regards to general anti-consumers and convenience goods. 3.4.1 Product The product development implies the invention and offering of products and/or services that are superior to other products/services thus create customer value based on the features it provides (Jobber, 2010). Product decisions involve considerations regarding brand names, packaging, quality, guarantees, etc. (Jobber, 2010) 3.4.2 Price The price represents the unit basis that the company will charge for the product/service. The pricing methods are crucial to marketers as it has to cover all expenditures but also has to reflect the positioning strategy of the product (Jobber, 2010). Customers perceive the price as Page 18 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis an indicator of value, and thus, the price considerations go beyond an expenditure/earningsperspective. 3.4.3 Place Place considerations involve decisions of distribution channels, location of outlets, transportation and inventory management (Jobber, 2010). The main purpose is to ensure that customers can get their products, in the right quantity and at the time and place they require. This dimension of the marketing mix often involves cooperation with suppliers and retailers and several other companies that influence the distribution. 3.4.4 Promotion Promotion constitutes considerations regarding the promotional mix, which is advertisement, personal sales promotions, public relations, direct marketing and online promotion (Jobber, 2010). These are the tools, which companies can use to create awareness of products/services and the benefits that it provides are communicated through. Each of the tools is appropriate in different situations and choosing the right mix of promotions is key to creating the right and sufficient awareness. In addition, the content of the promotions are of great importance in delivering the right message, which reflects the strategy of the company and the product provided (Jobber, 2010). Each of the marketing mix aspects includes decisions on various elements. An overview of the Marketing mix and its elements is depicted in Figure 3. Page 19 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Product Price • Variety • Quality • Design • Features • Brand name • Packaging • Services • List price • Discounts • Allowances • Payment method • Credit terms Target Market Promotion Place • Advertising • Personal selling • Sales promotion • Public relations • Channels • Coverage • Assortments • Locations • Inventory • Transportation • Logistics Fig. 3: The four Ps of the Marketing Mix (adapted from Kotler & Armstrong, 2010, p. 76) Page 20 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 4. Findings and analysis This section presents the findings that are collected through the method explained earlier in the thesis. 49 responses were collected and 46 respondents are classified as general anticonsumers, thus considered valid responses. The qualitative findings are also presented, however, only in a summarised form. To see the raw data and the full presentation of the qualitative answers, please confer Appendix 2. 4.1 Types of general anti-‐consumers To distinguish between Iyer and Muncy’s (2009) two general anti-consumer types, the simplifiers and the global Impact consumers, the respondents were asked to select the statement that resembles their motive for practicing anti-consumption most. The five statements are derived from Iyer and Muncy’s (2009) description of why people practice anticonsumption, and the distribution of answers is showed in Table 2. Primary motive for anti-consumption Answers To reduce material inequality 1 To help the environment 15 To avoid stress as consequence of (over-)consumption 7 To avoid distraction from higher (/more valuable) pursuits in life 8 It is immoral to focus so much energy on self-serving consumption activities 3 Other 12 Table 2: Motives for anti-consumption The majority of the respondents practice anti-consumption to help the environment (32,6 %), which, together with the second statement, is considered a motive of the global impact consumer (Iyer & Muncy 2009). The simplifiers’ motives constitute the next three statements, which is general anti-consumption based on personal concerns (Iyer & Muncy, 2009). Other motives were also specified: Some examples are to simply to save money/reduce expenses, to pay less tax to the government, to lose weight and others. However, this distinction makes it possible to group the respondents based on their motives. This can be seen in the Table 3. Page 21 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis General anti-consumer types Number of respondents Global Impact Consumers 16 Simplifiers 18 General anti-consumers in all 46 Table 3: Types of anti-consumers 4.2 Place of shopping First, the thesis looks at the results of where general anti-consumers buy convenience goods (Figure 5). Fig. 5: Preferred shopping place for convenience goods (%) 60 50 % 40 30 20 Global impact consumers 10 Simpli]iers 0 All general anti-‐consumers Type of store The results of the survey show that the preferred place for shopping convenience goods is in supermarkets. The question is a multiple-choice question; hence, respondents had the opportunity to select more than one answer. However, as it can be seen from Figure 5, among the global impact consumer respondents 38 % prefer to shop in supermarkets, more than half of simplifiers also prefer the supermarket (52 %) and in general, all respondents prefer the supermarket as shopping destination (45 %). In general, the majority of the respondents argue Page 22 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis for their choice of supermarkets as a matter of convenience, both in terms of transport time and in-store convenience, but also as a matter of low prices. However, respondents did also agree on street markets and farmer’s markets as preferred shopping destinations albeit to a much lesser extent. People who prefer street and farmer’s market have different reasons for this, e.g. that it is important to support the local community buy buying at local street markets, or that they buy some goods at the farmer’s markets due to better quality and locally grown foods. 4.3 Information source In terms of the information source that general anti-consumers make use of, respondents were asked to choose among four categories based on Kotler et al.’s (2009) four groups of information sources: Personal, commercial, public and experiential. The results show that a vast majority (66%-68%) of both respondent groups acquire information through “experiential” information search. Kotler et al. (2009) defines this information source as “handling, examining and using the product” (p. 248). About 20 % of the respondents of each group also make use of personal information sources, which are information on products from personal acquaintances such as family, friends and neighbours (Kotler et al., 2009). The results are shown in Figure 6. Fig. 6: Primary information source on convenience goods (%) 80 70 60 50 40 Global impact consumers 30 Simpli]iers 20 All general-‐consumers 10 0 Family, friends, Advertisements, neighbours, websites, displays, salespeople Mass-‐media By "hands-‐on" What is noticeable is that as less than 10 % say they acquire information from commercial information sources, although, according to Kotler et al. (2009), “the consumer receives the Page 23 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis most of information about a product from commercial – that is, marketer-dominated – sources” (p. 248). Furthermore, almost none of the respondents (0-5%) selected public information sources such as mass media and consumer-rating organisations, etc. 4.4 Frequency of buying The survey also asked the respondents how often they buy convenience goods in order to get a picture of how general anti-consumers shopping frequency is. The results are shown in Figure 7. First, the results show that when buying impulse convenience goods, 38 % of global impact consumers buys impulse convenience goods 2-3 times a month or 1 month or less. 47 % of the simplifiers buy impulsive convenience goods 1 month or less, 30 % 1-3 times a week, and 24 % buy 2-3 times a month. In general, 40 % of all respondents buy impulse convenience goods 1 time a month or less, 30 % 1-3 times a week and 28 % 2-3 times a month. Fig. 7: Frequencey of impulse convenience goods buying (%) 50 45 40 35 30 Global impact consumers 25 20 Simpli]iers 15 All general anti-‐consumers 10 5 0 4-‐7 times a week 1-‐3 times a week 2-‐3 times a 1 time a month month or less Never The results for frequency of staple convenience goods buying in general show a higher frequency of buying, which is very normal to do the necessity nature of the staple convenience goods. The majority of global impact consumers buy staple convenience goods 2-3 times a month (45%), and 22 % buy 4-7 times a week and the same percentage buys 1-3 times a week. What is very noticeable is that 75 % of simplifiers that have answered buy staple convenience goods 1-3 times a week, and 25 % buys 2-3 times a month. In general, 50 Page 24 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis % of the general anti-consumers 1-3 times a week 33 % buy 2-3 times a month. An overview of the results are shown in Figure 7. Fig. 7: Frequency of staple convenience goods buying (%) 80 70 60 50 Global impact consumers 40 Simpli]iers 30 All general anti-‐consumers 20 10 0 4-‐7 times a week 1-‐3 times a week 2-‐3 times a 1 time a month month or less Never 4.5 Preferences of impulse convenience goods The last part of the results concerns the actual preferences that the general anti-consumers have when buying convenience goods. The results have been analysed and an average score has been calculated based on the number of answers - the lower the score, the higher the importance. All determinants with an average score of 3.0, which is equal to ‘neutral’ in the rating system, or more, is considered not to be of importance to the respondents, and a score of 2.0 or less is considered to be of high importance. Therefore, this thesis will pay most attention to the determinants that score 2.0 or less. First off, the preferences of impulse convenience goods are presented in Figure 8: Page 25 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX 4 May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Fig. 8: Preferences of impulse convenience goods 3,5 3 2,5 2 1,5 1 0,5 0 Global impact consumers Simpli]iers All general anti-‐ consumers In order to make it clearer what preferences the respondents have, the results are sorted based on the lowest average score (= the highest importance) to show what determinants are of most importance to each group regarding impulse convenience goods. This can be seen in Table 4. Rating 1. 2. 3. 4. 5. 6. 7. 8. 9. Global impact All general-‐anti consumers Simplifers consumers Quality (1.8) Quality (1.5) Quality (1.8) CSR of company (2.1) Low price (1.6) Low price (1.9) Packaging (2.2) Healthy (2.0) Location of buying (2.3) Low price (2.3) Location of buying (2.3) Healthy (2.4) Location of buying (2.3) Brand's reputation (2.6) CSR of company (2.5) Country of origin (2.3) CSR of company (2.9) Brand's reputation (2.6) Organic (2.5) Organic (3.2) Country of origin (2.9) Healthy (2.5) Country of origin (3.3) Organic (3.0) Brand's reputation (2.8) Packaging (3.4) Packaging (3.0) Table 4: Ranked order of impulse convenience goods preferences As it can be seen in the table, global impact consumers, simplifiers and all respondents in total value quality highest when buying impulse convenience goods. When arguing for this the respondents generally agree that buying quality means that the product will last longer or that they do not need to use as much, which, in the long run, will reduce their consumption. Low price is considered the next most important determinant by simplifiers and all respondents in Page 26 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis total. The simplifiers argue for this that is important to buy cheap products so that they can save money for other purposes, or simply because they won’t have to work too much and therefore can save time to do other things in life. Other respondents argue that is just a matter of (tight) budget that makes them prefer low priced products, thus they prefer buying cheap convenience goods so they can spend the rest of the money on buying sustainable goods of other product categories. The CSR profile of the company is considered next most important by the global impact consumers, however, it scores an average of 2.1, and is therefore not considered very important. Looking at the arguments for CSR as preference, the respondents generally state that it is important that the company also has the planet (environment and society) in mind when doing business. 4.6 Preferences of staple convenience goods The results of the question regarding staple convenience goods are shown in the Figure 9. The lower an average score, the higher importance to the respondents. Fig. 9: Preferences of staple convenience goods 4,5 4 3,5 3 2,5 2 1,5 1 0,5 0 Global impact consumers Simpli]iers All general anti-‐ consumers Ranking the determinants from high to low (Table 5) it once again shows that quality is of most importance to the global impact consumer, second most important to simplifiers, and most important to in general when buying staple convenience goods. Page 27 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX Ranking 1. 2. 3. 4. Global impact consumers Quality (1.8) Healthy (2.1) Low price (2.2) CSR of company (2.2) 5. 6. 7. Country of origin (2.2) Organic (2.4) Location of buying (2.6) 8. 9. May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Simplifers Low price (1.6) Quality (1.8) Healthy (2.1) Location of buying (2.3) Brand's reputation (3.0) CSR of company (3.6) Organic (3.7) All general-‐anti consumers Quality (1.6) Low price (2.0) Healthy (2.1) Location of buying (2.6) Organic (2.9) Country of origin (3.0) CSR of company (3.0) Brand's reputation Packaging (2.6) Packaging (3.7) (3.1) Brand's reputation (3.2) Country of origin (3.9) Packaging (3.1) Table 5: Ranked order of staple convenience goods preferences The reasons that the respondents give for preferring quality when buying staple convenience goods are basically the same as impulse convenience goods. It is still a matter of buying quality products to decrease consumption and waste. Buying better quality products the products last longer thus the total expense will be less for the consumer. However, low price is also important to the respondents, although more important to simplifiers. The reasons for preferring low price products are to lower consumption in general and save money to use it on other purposes. The main difference between the preferences when buying impulse and staple convenience goods is that more of the respondents value healthy products when buying staple convenience goods. However, the health attribute only scores 2.1 and is therefore not regard as being of high importance. It can be seen that simplifiers only consider four of the determinants important, whereas global impact consumers consider eight determinants important. Page 28 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 5. Suggestions on the right marketing mix strategies Based on the findings from the empirical research, the thesis will propose strategic decisions, which can help in the development of the right marketing mix in order to target and attract general anti-consumers. The product and pricing decision as well as place/distribution decisions will mainly regard decisions that affect the actual purchase-decision, whereas the promotion decision also will concern the information search stage of the decision-making process. The suggestions will be supported by knowledge about anti-consumers. 5.1 Product The findings show that the general anti-consumer when buying convenience goods in general regards quality as a very important determinant. Maslow developed his Hierarchy of Needs theory, which describes the needs that a human being has and the dependence and hierarchical correlation that exist between these needs (Solomon et al., 2010). As Iyer and Muncy (2009) stated, general anti-consumers practice anti-consumption for instance to pursue higher purposes in life (simplifiers) or to help the environment in general (global impact consumers). This reflects the highest level of Maslow’s hierarchy of needs, namely the self-actualisation need, which is the need for “self-fulfilment, enriching experiences” (Solomon 2010, p. 186). General anti-consumers’ self-actualisation is supported by the means of and dependent on their anti-consumption. The anti-consumption practice is dependent on buying as little as possible by buying convenience goods that are of a certain quality and low prices – in this way, the general anti-consumer can use the extra time and money on self-fulfilling actions. One might think that CSR of company or organic features are of most importance to for instance the global impact consumers. However, Black and Cherrier (2010) found in their analysis of anti-consumption as part of living sustainable that, “Although our analysis notes that our informants strongly adhere to environmental preservation and care for nature, the actual practices of anti-consumption for sustainability mostly relate to a concern for selfexpression, either in terms of identities or desired identities.” (p. 446). This can explain why quality and price is more important to general anti-consumers. It is basically more important to buy less and of better quality than buying environmentally friendly products. Therefore, the products that they buy have to be of a certain quality but still at a fairly low price, hence, companies must find the right balance between quality and price. Page 29 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Cravens et al. (1988) describe five perspectives on defining quality of a product. Two of the approaches are appropriate to consider when developing products for general anti-consumers: The product-based approach and the value-based approach (Cravens et al., 1988). In the product-based approach, the perception of quality from the consumer is linked to a certain ingredient or attribute of the product. In terms of convenience goods, this can be the exclusion of certain additives in foods, no harmful chemicals in cleansing agents, or the use of only natural ingredients in confectionary. This can make general anti-consumers perceive the product as high quality and thus make them buy the product, because they value high quality products that help them in their anti-consumption purposes. The other perspective is the value-based approach where the marketer considers the trade-offs between quality and price (Cravens et al., 1988). According to Cravens et al., “the highest value represents the most favourable combination of quality and price.” (p. 287). The findings show that both price and quality generally were considered to be of high importance; therefore, the companies must find the right balance between low price and quality. The general anti-consumer is not willing to invest a lot of money in products of high quality – they prefer to buy as little as possible, at a low price but at high quality. As one respondent stated when asked what companies should do to make convenience goods more attractive, “…use more quality ingredients and offer more competitive pricing.” The general anti-consumer does not want luxury goods nor discount products, but rather products that are placed somewhere in the middle so their motives of anti-consumption can be focused elsewhere than convenience goods buying. 5.2 Price In order to choose the right price for the convenience goods, the company must be aware of low price and quality being among the most important determinants by general anticonsumers. Thus, not only will the quality of the product in question have to be ensured, the price must also be competitive. The company therefore must choose to select the appropriate pricing objective when positioning its marketing offering to attract consumers (Kotler et al., 2009). Kotler et al. propose five major price objectives, and one includes considerations regarding product quality, the product-quality leadership. By being product quality leader in the market, the products are characterised “by high levels of perceived quality, taste and status with a price just high enough not to be out of consumers’ reach” (Kotler et al., 2009, p. 582). This is also what companies in the convenience goods markets should strive for when developing the Page 30 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis marketing mix aimed at general anti-consumers. A possible appropriate pricing method is value pricing, which can help companies win loyal customers by charging a fairly low price for a product of high quality (Kotler et al., 2009). More specifically, in order to attract general anti-consumers, the companies are suggested to adopt a value price type named everyday low pricing (EDLP), which is used in retail (Kotler et al., 2009). This decision lies with the retailer rather than the producer but should still be used in order to attract general anticonsumers. The strategy is to charge a constant low price with little or no price promotions to eliminate price uncertainty from the consumers. As the result showed, general anti-consumers prefer low price products often because they are on a budget or want to spend more money on other things, and furthermore, they do not conduct extensive prior information search on convenience goods. Therefore, a fairly low, constant price can match these preferences of the general anti-consumers, because they will know the price at all times and do not experience price fluctuations due to promotion prices etc. 5.3 Place In designing the right marketing channel, a company has to analyse the consumers’ needs through five service levels. These are quantity, waiting and delivery time, convenience, product and service variety and service backup (Kotler et al., 2009). In general, the respondents favour high convenience in terms of price, location and variety products at the same place. To suggest appropriate place strategies, the marketers should consider choice of place utility, which is concerned with delivering products where the consumer wants to purchase them (Peter and Olson, 2005). The majority of the respondents prefer the supermarket for shopping convenience goods. The reasons are that they save a lot of transport time and transport expenses due to the short distance and the variety of products available at one place, and the prices are generally lower at the supermarket. Supermarkets are large selfservice stores, and they often position themselves with focus on the comparatively lower price (Jobber, 2010). Hence, companies producing convenience goods should make use of supermarkets as retailer of their products. Moreover, the company should strive to make use of a distribution channel with as few intermediary levels as possible, meaning the number of distributive locations from manufacturer to consumer (Kotler et al., 2009). This decision depends on a lot of variables such as country, quantities, products, etc. (Kotler et al., 2009), however, the fewer Page 31 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis intermediaries during the channel, the lower the expenses of distributing the product, hence, the possibility to offer a lower end-price to the consumer. Preferably, a 1- or 2-level channel should be established where the only intermediaries are retailer and wholesaler (in a 2-level channel) (Kotler et al., 2009). Hence, the company can offer its products at a lower price but still at same quality, which is paramount to general anti-consumers. The results of the findings also showed that the frequency of staple and impulse convenience goods buying varied. Impulse goods were purchased more rarely (1 time of month or less) than staple goods (1-3 times a week/2-3 times a month), and dependent on the type of convenience goods, the company will have to choose appropriate distribution channels and frequencies that reflect the buying habits of the general anti-consumers. In general, it is also important that both staple and impulse convenience goods are available at the same supermarket, as respondents highlighted the convenience of buying all things at the same place 5.4 Promotion The findings shows that the majority of general anti-consumers do not make use of commercial information source and public information sources when actively searching for information during the decision-making process. Dobscha (1998) found that consumers rebelling against marketing often are against advertising and other marketing communications, because it does not reflect their values and concerns. However, they might still be object to marketing communication tools if they message conveyed relates to values and beliefs of anti-consumers, so therefore companies must be sure that the content of the promotional strategies reflects what general anti-consumers value. The actual communication objective should serve to establish brand purchase intention, which is the goal of increasing the chances that consumers will buy the brand, and establish brand awareness, which is the level to which consumers activate a brand from memory to inclusion when they recognise a need (Peter and Olson, 2005). The findings showed that when gathering information about product alternatives, the respondents merely make use of experiential information sourcing - the actual handling and examining the products (Kotler et al., 2009). Therefore, establishing brand awareness will enhance the chances that a company’s brand will come to mind of the consumer. Establishing brand purchase intention will ensure Page 32 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis that when general anti-consumers are presented to the communication, their needs are enforced and they recognise that the purchase decision of this product will provide them with the right benefits that are in accordance with the anti-consumption lifestyle. The message strategy should therefore try to highlight points of difference, which is the communication of attributes that are important to the consumer and that other regular products are missing (Kotler et al., 2009). Black and Cherrier (2010) found that often there exists a green gap between buying behaviour and values, and that anti-consumer may find green products attractive but in the purchase decision they value quality over sustainable features. Thus, the point of difference communicated in regards to global impact consumers should be the quality and price benefit of the product, rather than environmental and societal benefits. The same goes for simplifiers, who, according to Black and Cherrier (2010) refuse to purchase items that fail to improve their level of happiness, which is to leave time and resources to other pursuits in life. This also explains the preferences that thesis found, so therefore, Black and Cherrier (2010) suggest that companies should highlight “self interested notions of taste, durability, quality, value or positive emotions that can be anticipated prior, during and after the practices has been performed” (p. 451) and “highlight the economic, convenience or functional benefits” (p. 451) rather than highlighting the environmental and societal benefits. When choosing the right marketing communications tool, it is important to note that the findings show that a vast majority of respondents only make use of experiential information sources in the information search stage. One way to comply with this and influence the information search and, hence, the purchase decision, is by using in-store sales promotion for instance in the form of sampling, which is are free samples to promote a specific product (Pickton & Broderick, 2005). Thus, when general anti-consumers visit supermarkets, they will be met by free samples of convenience goods products that can help them in the information search. In this way, the company can ensure that the points of difference are communicated to the customer at the moment where they gather information, and that they become aware of the brand for future purchase. If companies in the convenience goods market adopt some of the suggestions provided by this thesis, chances of success in targeting convenience goods products to general anti-consumers can be enhanced. However, the thesis recognises that many decisions regarding the marketing mix development are company and product specific; thus, the actual success of a product or Page 33 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis brand relies on a myriad of marketing decisions. Therefore, the suggested and presented strategies should be considered guidelines or a framework rather than a specific solution. Figure 10 shows a summary of the suggested strategies that companies in the convenience goods market should adopt in developing an appropriate marketing mix targeted at general anti-consumers. Product Price • Focus on high quality and low price • Product-‐ quality leadership pricing objective • Value Pricing method • Value-‐based approach • Product-‐based approach • Everyday low pricing (EDLP) General anti-‐ consumers Convenience goods Place Promotion • Supermarkets as retailers due to convenience • Objectives • Maximum 2-‐level channel • Differentiated delivery frequency dependent on type of anti-‐ consumer and goods type • Establish brand-‐purchase intention • Establish brand awareness • Strategy • Highlight points of difference • Economic, convenience and functional bene]its • Tool • In-‐store sales promotion • Sampling Figure 10: Suggested marketing mix strategies Page 34 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis 5. Conclusion Setting out to investigate the preferences of general anti-consumers, the empirical findings of this thesis show that the respondents’ preferences of convenience goods generally are quality and low price. Furthermore, the findings show that the respondents prefer experiential information sources in the information search process and their preferred place of shopping is supermarkets. These stimuli are preferred as they result in the general sought after benefit that they entail. When arguing for their preferences, in general, the respondents find price, quality and general convenience of high importance, because the saved expenses and time connected with these benefits can contribute in practicing general anti-consumption elsewhere. These findings stem with the literature on anti-consumer that argue that they favour functional benefits over other benefits, as it is a means for practicing anti-consumption through other dimensions of life. Suggested marketing mix strategies have been presented based on the findings and anticonsumer literature that support and contribute in understanding the findings. The thesis suggest that the focus of the marketers should be on finding the right balance between low price and quality through a value-based approach and/or a product-based approach to quality. The pricing objective should be to support this quality/price relationship by product-quality leadership through the means of value pricing, more specifically, everyday low pricing methods. In terms of place suggestions, the suggested distributions strategies include supermarkets as retailers and maximum of 2-level channels to decrease expenses and ensure a low product price. Promotional suggestions include establishing brand awareness and brandpurchase intention by highlighting the points of difference of the products in question. More specifically, the marketers should promote products based on functional benefits for instance via in-store sales promotion such as sampling. The thesis recognises that the presented strategic suggestions is not be taken as an absolute. The results are based on a data sample, which may reflect the general behaviours of anticonsumers, but Shaw and Newholm (2002) found that the group of voluntary simplicity people (simplifiers) often have different purchasing strategies, thus, Shaw and Newholm argues that the limitations of marketing insights, such as surveys, “may suggest a false Page 35 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis homogeneity within this consumer group” (p. 182). This thesis therefore recognises, in accordance with the scientific approach of Critical Rationalism, that the findings and suggestions regarding simplifiers may not be fully applicable in all situations due to the heterogeneity of anti-consumption purposes. This recognised view applies to the entire thesis: consumer behaviour varies between persons, even within a socially defined segment, and, furthermore, marketing decisions are always product, company and market specific. Furthermore, the thesis only pays attention to the preferences of the respondents that are of most importance. However, the findings show that several determinants are of importance, thus appropriate marketing mix strategies may include several other determinants in the development of the marketing mix. Therefore, the overall strategic suggestions provided by the thesis merely serve as guidelines, which may enhance the possibility of targeting all general anti-consumers when developing appropriate marketing mix in the convenience goods market. Page 36 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis References Allen, E., & Seaman, C. A. (2007). Likert Scales and Data Analyses. Quality Progress 40(7), 6465. Bech-Jessen, F., & Vaaben, L. (2010, December 18). Antiforbrug er blevet kæmpe forretning. Kristeligt Dagblad. Retrieved from http://www.kristeligtdagblad.dk/artikel/400416:Danmark--Antiforbrug-er-blevet-kaempe-forretning Birsch, S. (2012, July 6). How activism forced Nike to change its ethical game. The Guardian. Retrieved from http://www.guardian.co.uk/environment/green-livingblog/2012/jul/06/activism-nike Black, I. R., & Cherrier, H. (2010). 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Eurasian Journal of Business and Economics, 4(8), 31-50. Kotler, P., & G, Armstrong. (2010). Principles of Marketing (13rd ed.). Upper Saddle River, N.J. : Pearson Education Kotler, P., Keller, K. L., Brady, M., Goodman, M., & Hansen, T. (2009). Marketing Management. Harlow: Pearson Education Limited. Lee, M, & Fernandez, K. V. (2009). Anti-consumption: an overview and research agenda. Journal of Business Research, 62(1), 145-147. Peter, J. P., & Olson, J. C. (2005). Consumer Behavior & Marketing Strategy (7th ed.). New York: The McGraw-Hill/Irwin Pickton, D., & Broderick, A. (2008). Integrated Marketing Communications (2nd ed.). Harlow: Pearson Education Limited. Reddit (2013). About Reddit. Retrieved from http://www.reddit.com/about/ Reinecker, L., & Jørgensen, P. S. (2012). Den gode opgave – håndbog I opgaveskrivning på videregående uddannelser (4th ed.). Frederiksberg C: Samfundslitteratyr Schrøder, K. C. (2001). Beyond the Pioneer Days! Where is Reception Research Going? Cross Fertilization of Paradigms: A Synthesizing Approach to Qualitative Audience Research. Nordicom review, 22(1), 23‐36. Self-sufficientish (2013). About Us. Retrieved from http://www.selfsufficientish.com/main/about/ Shaw, D., & T, Newholm. (2002). Voluntary Simplicity and the Ethics of Consumption. Psychology and Marketing, 19(2), 167-185. Solomon, M. R., Bamossy, G., Askegaard, S., & Hogg, M. K. (2010). Consumer Behaviour. A European perspective (4th ed.). Harlow: Pearson Education Limited. Page 38 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Appendix 1 – Questionnaire design Page 39 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 40 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 41 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 42 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 43 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 44 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 45 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 46 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Appendix 2 – Questionnaire results Page 47 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 48 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 49 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 50 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 51 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 52 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 53 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 54 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 55 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 56 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 57 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 58 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 59 of 65 Nicolai Lund Nygaard Pedersen Student ID: XXXXXX May, 2013 Supervisor: Louise Genefke BA MMC – Bachelor Thesis Page 60 of 65
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