Impact Of Product Packaging On Consumer’s Buying Behavior – Chicco Case Study

Environment analysis

What Is The Impact Of Product Packaging On Consumer’s Buying Behavior?

The organization chosen for the marketing plan is Chicco, Australia. Chicco, established in 1958, was initially restricted to Europe, carrying out its functions out of Italy. However, as Chicco gradually became a household name, it expanded globally and today it caters to families in over a hundred and twenty countries. In Australia, Chicco is one of the most reliable and sought after brands as far as prams and baby strollers are concerned (Chicco Australia 2018). Chicco has also garnered praise across the world by catering to parents on the go by manufacturing travel gear designed especially for children (Clement and Waitt 2018). Chicco mainly comprises products for babies and toddlers up to the age of three. It has a dedicated baby research centre, which is known for carrying out thorough market analysis with regards to the social, emotional and psycho-physical needs of a baby; the outcome of such a market analysis would then be used to develop specialized baby products (Chicco.in 2018). The company mission statement speaks volumes about their vision – and about their target market, namely new families and how Chicco could guide them on their growth journey. Chicco guarantees safe solutions for growing families all of which are crafted to meet the unique needs and challenges of having a new baby.

Chicco has successfully earned the trust of parents all over the world and in Australia (AYDIN, Ar and TA?KIN 2014). Before chalking out a marketing plan for Chicco in Australia, it is important to understand the environment the company would be operating in. The baby stroller industry in Australia is still in the developing phase, and there are a number of factors like rivalry with other companies, political forces, social and cultural forces, technological factors and so on, which influence the sale of baby prams.

As of 2018, it can be safe to say that the price of baby care products, including prams and strollers is soaring; yet, as studies show, parents in Australia would rather pay attention to quality and safety standards than the expenses involved. Families today are more likely to invest in baby care products than ever before. The primary trend that must be taken into account as far as the baby stroller industry is concerned is that of a functional design. More than style or appearance, a parent would prefer a design that is lightweight, portable and seamless in terms of functionality. Moreover, the baby strollers need to be durable and compatible with the busy lifestyles of the parents. For instance, Chicco has introduced baby strollers that come with ample space for storage. Similarly, enhanced packaging trends have emerged which are sophisticated and keep in mind the requirements of the parents (Raheem, Vishnu and Ahmed 2014).

Current trends in the baby stroller industry

While Chicco certainly holds a significant share of the baby stroller industry as one of the oldest companies in this sector, it must be stated that there is no dearth of rivals. As a matter of fact, Chicco faces tough competition from some of the homegrown companies, like Redsbaby. This particular company was founded in the year 2013, by an Australian couple. The company markets its products stating that they manufacture baby prams and strollers that are uniquely Australian. Chicco has often earned criticism for manufacturing prams that are distinctively European in terms of functionality and style. While catering to an Australian audience, Chicco would need to adapt to the culture and lifestyles prevalent in Australia.

The market for baby strollers and prams is expected to grow at a steady rate for the next five years; it is also assumed that the industry will attain a CGAR of nearly six per cent by the year 2021 in Australia (Fox, Dillard and Mongrain 2014). The lack of skilled and efficient labor and the increasing cost of raw materials required for the manufacture process also tend to have an adverse impact on the revenue generation of Chicco. However, the incorporation of online trade and ecommerce, which enables parents across Australia to purchase prams through the internet, has certainly lured in more customers in the last few years.

In Australia and across the globe, there are several laws and regulations surrounding the safety factor associated with baby products, and especially baby strollers. It is thus Chicco’s responsibility to ensure that these policies and guidelines are adhered to. The Australian Competition and Consumer Commision or ACCC has issued a consultation which examines the safety measures and protocols that manufacturers of baby strollers and prams must follow (Product Safety Australia 2018). It is also imperative to study the safety standards with regards to the changing industry scenario and trends.

Political influences and factors

The political environment in Australia is relatively stable and has no longstanding impact on the manufacture and production of baby prams and strollers across the continent. However, the Australian government has stringent policies in place with regards to safety standards (Accc.gov.au 2018). While introducing a new product, Chicco would be advised to analyze the regulations and norms regarding the same.

Technological factors

Chicco, since time immemorial, has always assured its customers of the quality of product provided to them. The company has a research centre which ensures that only the top notch technology is utilized to manufacture new and innovative strollers – all of which are aimed at making the lives of babies and their families easier. For instance, there is ongoing research on the myriad advantages and disadvantages of a hands free stroller that could be navigated through a remote (Ng, Brewster and Williamson 2013).

The marketing environment

Social and cultural factors

While catering to an Australian market, Chicco would have to keep in mind the culture and traditional values of the country they are operating in. It must be remembered that each nation has distinct beliefs as to how children should be raised; thus, the products and services that fared well in the United States or United Kingdom might not appeal to an Australian audience (Jensen 2017).

In order to draft a marketing plan, it is important to scrutinize and understand the psychology of the target audience and the social and cultural factors affecting their decision (Burns, Bush and Sinha 2014). Parents purchasing baby strollers and prams for their newborn babies are likely to make decisions based on their emotions. As a result, Chicco has always followed a marketing and advertising policy that tugs at the new parents’ hearts. Chicco offers a number of products ranging from baby cosmetics and clothing to baby strollers or prams and toiletries. With that in mind, it can be suffice to say that the target market for Chicco would be new mothers, pregnant women and newborn infants. Since Chicco manufactures and sells products for infants up to the age of three, it can be assumed that the target audience would be mothers within the ages of thirty to thirty five. At present, new families are more likely to invest in their baby’s welfare, meaning that price is usually not a factor. However, Chicco has an inclusive pricing strategy, marketing products that range from affordable to high range.

A detailed S.W.O.T analysis is instrumental in understanding the strengths, weaknesses, opportunities and threats of a company so as to develop a marketing plan accordingly (Ayub et al. 2013). In the section below, an in depth internal and external analysis of Chicco has been provided.

Strengths

• Chicco offers a plethora of options as far as baby strollers and prams are concerned. Parents are at complete liberty to choose from a wide range of products, based on their choice and needs.
• Attractive packaging is included to appeal to the customers.
• Safety standards are adhered to. Every product manufactured by Chicco is in compliance with the safety guidelines and regulations as specified by the ACCC.
• Above satisfactory quality in terms of product

Weakness

• Since Chicco has been in operation for over fifty years, the company is quite set in its ways. It is not as receptive to modern and innovative technology as newer, more flexible brands are.
• While Chicco is certainly one of the most prominent baby care brands across the globe, it is yet to make a mark in the Australian market.

Opportunities

• Rural penetration
• Non- traditional modes of marketing and advertising
• Successful brand positioning owing to word of mouth publicity

Threats

• Market share, because of the emergence of rival companies
• The rise of Australian baby pram stroller companies that cater to a specifically Australian demographic.

From the S.W.O.T analysis, it can be assumed that only major threat to Chicco’s dominance over the Australian baby pram market would be the strong competition from rival companies like Redsbaby. Like citizens of any nation, Australians would be more inclined to purchase goods from companies of their homeland. Similarly, Chicco initially tried to impose the same promotional and marketing strategies that worked in the United States and Europe to the Australian audience, forgetting that each country has a culture and traditional values that are unique to its people. However, it must also be remembered Chicco has established global leadership in baby care with the sheer force of its high quality products. One way of eliminating rivals in this sector would be by offering the customers a unique benefit that other brands in the same industry would be unable to match up to. For instance, Chicco could introduce technologically advanced hands free, portable strollers which could come to the aid of busy parents.

Economic factors

The main purpose of the marketing plan is to ensure that Chicco, which has become a household name all over the world, gains the same prominence in Australia as well. The need of the hour is to develop a solid mission statement that pays heed to the customer. A customer oriented strategy must consequently be developed in order to enhance the sales of baby strollers and plans (McDonald 2016). In addition, it is equally important to come up with benchmarks which can measure the success of the marketing objectives. The marketing objectives must be listed keeping in mind the tough competition faced by the company and the current market trends.

The target market for Chicco would be new parents (between the ages of twenty five to thirty five) belonging to the high income groups. Chicco’s marketing plan would also be catering to the huge population of single mothers in Australia, between the ages of twenty and twenty five.

A marketing mix can be used to study the product sold by the company, Chicco in this case, and the strategies that would determine pricing and promotional campaigns (Londhe 2014).

• Product – The product in question is a baby pram or stroller. Although Chicco harbors a large number of products ranging from baby toiletries to strollers, the company is planning to lay emphasis on the new, designer prams which are not only durable and lightweight but also stylish.
• Price –A high income strategy will be followed by Chicco; this was done keeping in mind the fact that parents in Australia are not willing to compromise as far as the quality and safety of their babies’ products are concerned (Li, Xu and Li 2013).
• Distribution –A direct marketing strategy will be adopted by Chicco to reach out to their target audience. As a matter of fact, both traditional and new media will be used for advertising and marketing purposes.
• Promotion- Promotional campaigns would be carried in the form of mails and direct advertising so as to call for action immediately.

A customer oriented marketing organization will be followed in Chicco’s case. In such an organization structure, the marketing strategy would be entirely customer centric, and would take into account all the unique needs of the various customer groups (Angulo-Ruiz 2014).

The marketing plan intends to position the brand, Chicco, as the premier choice for baby care products, especially for baby strollers and prams. The first step of the action plan would be to carry out a target based marketing and promotion campaign after a thorough market analysis. Direct marketing would be the preferred choice in this case, and both traditional and new media would be put to use. Strategic management of available resources and efficient means to tackle the impending threat of competing brands must also be kept in mind while spreading the word about Chicco, and the products it offers.

All the activities pertaining to the marketing plan would have to be implemented during the upcoming fiscal year. The budget plan is as follows:

Figure: Budget Plan

(Source: Author)

While drawing a marketing plan, it is imperative to list ways of measuring the success of the plan itself. Controls must be made so as to ensure that the discrepancy between the expected outcome and the actual outcome is reduced. For that, it is essential to keep an eye on all expenses and have a detailed report of the same. It is the responsibility of the marketing director to ensure standardized reporting and make sure that the project is completed within the specified budget.

After implementing the marketing plan, it would be necessary to evaluate the progress made at regular intervals. For this, monthly evaluations will be conducted to ensure that the project is on track; a systematic project management method would be used for the same. Such a functional monitoring method would render the marketing plan for Chicco to fruition.

References:

Accc.gov.au.,(2018).[online]Availableat:https://www.accc.gov.au/system/files/Prams%20and%20strollers%20-%20Supplier%20guide.pdf.

Angulo-Ruiz, F., Donthu, N., Prior, D. and Rialp, J., 2014. The financial contribution of customer-oriented marketing capability. Journal of the Academy of Marketing Science, 42(4), pp.380-399.

AYDIN, G., Ar, A.A. and TA?KIN, Ç., 2014. The role of brand trust on parents’ purchase intentions of baby-care products. Do?u? Üniversitesi Dergisi, 15(2), pp.165-180.

Ayub, A., Razzaq, A., Aslam, M.S. and Iftekhar, H., 2013. A conceptual framework on evaluating SWOT analysis as the mediator in strategic marketing planning through marketing intelligence. European Journal of Business and Social Sciences, 2(1), pp.91-98.

Burns, A.C., Bush, R.F. and Sinha, N., 2014. Marketing research (Vol. 7). Harlow: Pearson.

Chicco Australia., 2018. Home | Chicco Australia. [online] Available at: https://chicco.com.au/

Chicco.in., 2018). Osservatorio Chicco – Baby Research Center | Chicco.in Official Website. [online] Available at: https://www.chicco.in/who-we-are/osservatorio-chicco.html

Clement, S. and Waitt, G., 2018. Pram mobilities: affordances and atmospheres that assemble childhood and motherhood on-the-move. Children’s Geographies, pp.1-14.

Fox, E.B., Dillard, L.L. and Mongrain, S.A., Amazon Technologies Inc, 2014. Automatic product groupings for merchandising. U.S. Patent 8,762,227.

Jensen, M.T., 2017. Urban pram strolling: a mobilities design perspective. Mobilities, pp.1-17.

Li, Y., Xu, L. and Li, D., 2013. Examining relationships between the return policy, product quality, and pricing strategy in online direct selling. International Journal of Production Economics, 144(2), pp.451-460.

Londhe, B.R., 2014. Marketing mix for next generation marketing. Procedia Economics and Finance, 11, pp.335-340.

McDONALD, M.A.L.C.O.L.M., 2016. Strategic marketing planning: theory and practice. In The marketing book (pp. 108-142). Routledge.

Ng, A., Brewster, S.A. and Williamson, J., 2013, September. The impact of encumbrance on mobile interactions. In IFIP Conference on Human-Computer Interaction (pp. 92-109). Springer, Berlin, Heidelberg.

Product Safety Australia., 2018. Prams & strollers. [online] Available at: https://www.productsafety.gov.au/standards/prams-strollers.

Raheem, A.R., Vishnu, P. and Ahmed, A.M., 2014. Impact of product packaging on consumer’s buying behavior. European journal of scientific research, 122(2), pp.125-134.

Srivastava, N., Dash, S.B. and Mookerjee, A., 2015. Antecedents and moderators of brand trust in the context of baby care toiletries. Journal of Consumer Marketing, 32(5), pp.328-340.

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