Demographic Segmentation
Question:
Discuss about the Consumer Behaviours for Bunnings Warehouse.
Established in 1887, Perth, Australia, Bunnings Warehouse is an organisation that sells domestic hardware items. The company operates under the parent organisation Wesfarmers since 1994 (Bunnings.com.au, 2018). The company has its operations in Australia and New Zealand. The product range of the company starts with home improvement and outdoor living items to being a significant supplier of project builders as well as housing industry (Bunnings.com.au, 2018). The company is a consumer and an employee centric organisation and has explained that the team members form the “heart and soul” of the organisation. Bunnings warehouse have a range of store format in which it 253 warehouses, 77 smaller format stores, 33 trade centres and three frame and truss centres operating across Australia and New Zealand. This helps the company to cater to a wide range of customers who are form the B2B as well as B2C sectors. The company earned revenue of around $11.5 billion in 2017. The company also has 40,000 employees as recorded on 30th June 2017 (Bunnings.com.au, 2018).
Demographic: The company targets people from the age group of 18-55 as they have products that will cater to the DIY projects as well as industrial construction items. The price of the products is kept low as the income group of the market is low to medium.
Geographic: Location that is targeted by the organisation is Australia, New Zealand, UK and Ireland. This is one of the major aspects of the target market as the company is focused on reaching out to most people who require the service. Though the company has a website where there are products listed and the customers can easily buy form but as far as hardware items are considered most consumers would like to see the item physically and then purchase.
Behavioural: The products are targeted to people who want to construct and create items for domestic purposes
The segment of the target market that is going to be catered in the assignment is geographic as it is observed from the company overview that the strategic management plans apply with the expansion of the business so that the people in various parts of the countries in which the organisation has its operations can be reached. In order to further expand the operations of the business in UK and Ireland with the help of merger and acquisition strategies, Bunnings Warehouse acquired Homebase which is a popular domestic hardware and improvement organization of United Kingdom and Ireland. The first Bunnings Warehouse store was established in February 2017 in St Albans. The company also has nine other projects in the pipeline. By the end of 2017 there were 15 Bunnings Warehouses and 234 Homebase stores working throughout the United Kingdom and Ireland. The company has around 12,000 employees in this area (Bunnings.com.au, 2018).
Advertising: Out of home advertising is used with the help of billboards and digital billboard, the company also uses print medium to communicate with the people in the form of newspaper advertising, brochures, etc. Apart from this the company has its own catalogue which has the items listed which are found in the shops. The company also used the social media platform in order to reach out to the people, who have been targeted.
Geographic Segmentation
Strength of the approach is that most of the target market can be communicated with advertising in the traditional channels.
Weakness: the company should explore new medium like digital in order to reach out and explore new market opportunities.
Consumer motivation: The idea here is to get the customers motivated to buy or be interested in a product or service, the lowest price strategy that the company incorporates in the communication process is one of the ways in which the people can be motivated. Claiming to be providing an item at the lowest cost challenge can get people excited. Then the people will be making a decision for purchasing the item this will be motivated reasoning as they will contemplate on the need of the item. In the case of Bunnings the “goal” factor of motivation is relevant, the goal of creating something or repairing some household things (Turner & Pennington, 2015).
Ability: This message also fits with the financial ability as well as the ability to get the item of the target market that has been chosen.
Opportunity: there is no complication or any kind of distraction in the process of buying and the advertising tools effectively works for the company (Turner & Pennington, 2015).
The above figure states the process by which a marketing plan has to travel in order to get the attention of the consumers.
Awareness of a brand is created by the communication that is strategically planned by the marketing team. Exposure to the correct information or stimulus is important in order to motivate the people and the time factors in this case are also important. Awareness is the most important impact of exposure, it is said that continuous exposure to information can evolve liking for a product or service, this has been discussed by (Bornstein & Craver-Lemley, 2016). Furthermore, consistent exposure also gives rise to perceived truthfulness of the claims. For example: The organisation is planning to launch a new brand and has planned to give discounted price for a day. If the customers are not exposed to this piece of information at the right time then the plan of promotion will be a waste. In order to improve the knowledge exposure the company has to invest in the correct medium for releasing the information, this is based on the consumers’ use of medium. The values of the company are based on three aspects that the company undertakes in order to operate in the business environment:
- Lowest price
- Range of products
- Premium service (Bunnings.com.au, 2018)
The communication strategy of the company focuses on these values as it exposes the customers in their advertisement with the price and the range of products which are available in the stores. The image of the company is based on these two values as the customers know that they will find any kind of hardware items in the store at the low price. This has not only been the impact of communication but is also because the company has been in the industry for long and in this tenure of operation they have garnered reputation for having these values. Furthermore, the communication strategy is helping the organization build the image (Huang & Hsieh, 2013).
Behavioral Segmentation
Attention is the next step that is followed by the communication strategy, now that the information is out there. The customers have to be engaged so that they pay attention to the information so that they can understand and perceive it. The amount of information that is out there for the customers are applauding every organisation that is trying to communicate with the customers, hence attention becomes crucial. Attention is selective, limited and can be divided. In order to establish attention, business organisations use audio as well as visual elements in the advertisements. With the help of marketing stimulus consumer attention can be enhanced. Some of the aspects that are usually used are personal relevance like need, want and self-concept; attractiveness with elements in the form of audio or visual; creativity and elements of shock. In the case of Bunnings the website of the company has the following image at the top of the home page.
There is a lot of information in this single frame but what stands out and immediately catches the attention of the people is the “ Price Guarantee” and “10 % “. This helps in making the customers interested in rest of the message. The message uses the elements that has been discussed above in order to gather the attention of the people especially elements of personal relevance and visual aspects are used in this case.
Perception is the process of understanding and reasoning with the features of stimulus in this case the advertisement and the marketing strategy of a company. Vision, hearing, taste, smell, or touch is the six senses in human beings which are used to perceive information. In advertising the company targets the vision of the customer to help them perceive the information that they have been exposed to. With the help of color, size and lettering the company focuses on the customer’s attention and helps them perceive the information. So that they can understand what the company is trying to communicate. Following is another OOH (out of home) advertisement of the company which uses the same elements of awareness, attention and perception that has been used in the previous advertisement but is very different from the previous one (Mullen & Johnson, 2013).
The colour of the advertisement, the lettering as well as the message is intriguing and adds to the brand image as well as helps in creating motivation among the target market as discussed in Part 1. Strength of the approach is simplicity of the text; weakness is the load of information that is provided in the advertisement the company uses texts instead of graphics of pictures which takes away from the attention span (Mullen & Johnson, 2013).
When a product, service or an idea is clearly distinguished from the others in the market with the help of elements like design, colour, symbol, language etc it is said to be a brand. Branding is done by the company so that the communication process is easy and the customers easily recognise the company (Solomon et al., 2014). It creates recall value as well as loyal customers who also advocates for the brand. Branding of a product or a service ensures that the consumers have a certain perception regarding the product or service. The brand schema or the association that is build with the help of the communication strategy of the company are: availability, low price, good range of products, stability, durability etc. This is a positive brand schema that is built with the help of the advertising tool which is used in several medium by the organisation. The company ensures that in the process of communication they focus on their USP and the values that run the operations of the business (Solomon et al., 2014).In order to ensure the recall value of the brand the company has a very distinctive logo, the colour and the font that is used in the design helps in recalling the brand. Following image is the logo of the company.
Advertising Strategies
The colours are striking as the red is common yet the second shade is contemporary the logo is also strategically designed to give an idea of the products that the company sell. This helps in creating brand identity which is the way consumers or the target market helps in recognising the brand. With the help of logo and tag line in this case” lowest price is just the beginning” the organisation helps in creating an identity. It creates the image of the company as it, which goes with the values that the organisation reinforces with the branding as well as the communication strategies (Albert & Merunka, 2013).
With the help of the communication process the company has successfully placed itself as an organisation that is focused towards providing the customers with value products from a wide range of items to choose from. The company uses a lot of OOH advertising to facilitate the learning and the memory of the brand with repeated visual aspects in the advertising medium. The personality aspect that is associated with the brand is in the form of sincerity as it has the image of being honest, down-to-earth, wholesome and cheerful. The customers are always greeted in the stores by cheerful and helpful executives who are in the uniform which is colour co-ordinated with the logo of the company (Albert & Merunka, 2013). The strength of this strategy is that the communication strategy is aligned with the values of the company and hence it reinforces the idea of being affordable at the same time good quality in the minds of the customer. The weakness of this approach is that there are other competitions in the market who are also trying to establish the same message though the company is back up with a goodwill and reputation in the Australian and New Zealand market, it is new in UK and Ireland, where the brand has competition (Albert & Merunka, 2013).
Attitudes are an appearance of an individual which reflects the general values in terms of the standard of living and perspective. With the knowledge regarding the attitudes of the target market organisations can anticipate the aforementioned aspects and use these in the process of communication to make sure that the customers are paying attention engaging interest growing a desire, as well as end up taking some positive action. This theory is explained in the AIDA theory of communication (Wijaya, 2015). As an established brand it can be said that the company has been successful in positive attitude towards its contribution to the customers and this has been persistent in the process of communication. The company has maintained a consistent feature of the communication by approaching the process of being simple yet impactful. The marketing stimulus of the company has always been focusing on the price that is offered by the company. The organisation is aware of the fact that the products they offer are also available elsewhere, hence their communication strategy ensures that they attract the attention of the customers. The organisation uses the frugal nature of the target market in order to place the communication strategy. As the organisation talks about the price extensively they try to capture this economic attitude of the target market (Solomon et al., 2014).
The strength of this aspect is that usually people are looking to save some money in the factors which do not require to have a luxury aspect and hardware items usually carter to the luxury market. The weakness of the strategy is that the focus is mostly drawn on the price which may make the people seem that the products are not up to the mark or is of a bad stock etc,. This will have a negative impact on the people (Solomon et al., 2014).
There are five steps in the process of consumer decision making: need recognition, search of information, evaluation of alternatives, purchase decision and lastly post-purchase decision. The communication strategy of the Bunnings warehouse ensures that there is influence in the evaluation of alternatives, purchase decision stages in the decision making process. As the strategy of the communication talks about the price of the products this is effective when the customer is looking for an alternative. The message says that if the customer can find the product at a cheaper price than what is offered by the store then they will get further discounts. On the other hand, this also impacts on the purchase decision of the customer (Shepherd & Rudd, 2014).
The weakness of this strategy is that the company should also focus on post purchase elements as it ensures loyal and repeat customers, on the other hand the company the strength is that the focus in concentrated on the aspect that they want to target and the company is clear with the message (Shepherd & Rudd, 2014).
- The company can focus on some other promotional tool like digital media
- The company should use more graphical and pictorial representation of the image and information to break the monotone of the communication
- The company should also focus on communicating regarding the quality of the product rather than just focusing on the price aspect.
- Post-purchase services should also be highlighted in the advertisement as that ensures repeat and loyal customers
Reference list:
Albert, N., & Merunka, D. (2013). The role of brand love in consumer-brand relationships. Journal of Consumer Marketing, 30(3), 258-266.
Bornstein, R. F., & Craver-Lemley, C. (2016). Mere exposure effect. Cognitive Illusions: Intriguing Phenomena in Judgement, Thinking and Memory, 256.
Bunnings.com.au. (2018). Price Policy. .bunnings.com.au. Retrieved 23 March 2018, from https://www.bunnings.com.au/price-policy
Bunnings.com.au. (2018). About us. bunnings.com.au. Retrieved 23 March 2018, from https://www.bunnings.com.au/about-us
Huang, Y. F., & Hsieh, P. J. (2013). The mere exposure effect is modulated by selective attention but not visual awareness. Vision research, 91, 56-61.
MacInnis, D. J., Moorman, C., & Jaworski, B. J. (1991). Enhancing and measuring consumers’ motivation, opportunity, and ability to process brand information from ads. The Journal of Marketing, 32-53.
Mullen, B., & Johnson, C. (2013). The psychology of consumer behavior. Psychology Press.
Shepherd, N. G., & Rudd, J. M. (2014). The influence of context on the strategic decision?making process: A review of the literature. International Journal of Management Reviews, 16(3), 340-364.
Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R. (2014). Consumer behavior: Buying, having, and being (Vol. 10). Pearson.
Thorson, E., & Moore, J. (Eds.). (2013). Integrated communication: Synergy of persuasive voices. Psychology Press.
Turner, T., & Pennington, W. W. (2015). Organizational networks and the process of corporate entrepreneurship: how the motivation, opportunity, and ability to act affect firm knowledge, learning, and innovation. Small Business Economics, 45(2), 447-463.
Wijaya, B. S. (2015). The development of hierarchy of effects model in advertising. International Research Journal of Business Studies, 5(1).
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