Consumer Behaviour in Marketing: A Case Study of Woolworths

This report discusses the meaning and importance of consumer behaviour in context with Woolworths, and its application in marketing. It also explains social, cultural and economic factors contributing to the emergence and expansion of modern consumer behaviour in context with Woolworths. The report includes a case study of Woolworths, an Australian supermarket in the retail sector, dealing in products like groceries, health, beauty and home products.

Principles & Practices
of Marketing-
Consumer Behaviour

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Meaning and importance of Consumer Behaviour in context with Woolworths........................3
Social, Cultural and Economic factors contributing to the emergence and Expansion of
modern consumer behaviour.......................................................................................................5
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Consumer Behaviour is the study of individuals, businesses or groups and other activities
related with the purchase and sale of products and services. It comprises of how the consumers'
buying behaviour is affected by their emotions, attitudes, tastes and preferences. It was emerged
as a discipline of marketing but now in the modern world, is associated with psychology,
sociology, marketing and economics etc. (Chopdar, Paul and Prodanova, 2022) The study of
consumer behaviour includes the research of individual qualities like personality lifestyles,
demographics, consumption patterns, customer loyalty etc. A consumer behaviour analysis helps
the companies to identify the decisions of customers regarding its products or services. The
companies are required to collect qualitative and quantitative data by customers' surveys,
interviews and observe their behaviour in-store and virtually as well. They need to consider
various factors affecting consumer behaviour (Bryson and et. al., 2022). The following report
will discuss about the significance of consumer behaviour for businesses and its application in
marketing. It will also explain social, cultural and economic factors contributing to the
emergence and expansion of modern consumer behaviour in context with Woolworths. It is an
Australian supermarket in retail sector, headquartered in New South Wales , Australia and
dealing in the products like groceries, (meat and packed foods), health, beauty and home
products. The report will explain consumer behaviour in context with Woolworths.
TASK
Meaning and importance of Consumer Behaviour in context with Woolworths
Consumer behaviour is the study of decisions made by the consumers regarding the
purchase of products and services of the company. Companies must analyse the buying patterns
of customers by observing in-stores or online for making effective marketing strategies.
Businesses must develop proper communication with the customers to get their preferences and
queries related to the products so as to develop a large customer base. This study and research of
consumer behaviour helps the businesses in expanding the business on a global basis and
developing a large customer base worldwide (Kumari and Bhateja, 2022). In context with
Woolworths, its social media analyst says that they strategically craft the engagement throughout
various social media platforms to observe consumer behaviour such as by Instagram, Facebook

and Pin interest by using Social-bakers Builder and Analytics. The following points describe the
importance of consumer behaviour for Woolworths :
 Price Policies : Analysing the consumer behaviour helps the companies in determining
the pricing policies. It helps the marketers to set the price in the market. This is because
when the price of a particular product rises, consumers switch to their substitutes. In
context with Woolworths , it maintains a slightly high price than in the market as it has a
large customer base due to its famous brand.
 Decision regarding sales promotion : Sales promotion marketing efforts contribute to
increase in consumer purchases. It helps in contacting with targeted customers and in
persuading them to purchase the goods of company. Consumer behaviour enables the
marketers in setting the marketing strategies. Woolworth uses billboards, leaflets,
newsletters etc. to promote its products to provide convenience to the customers
regarding product information that makes them loyal to the company.
 New Technological product : Introduction of a new product in the market with
technological advancement helps in studying the consumer behaviour in a convenient
manner. After analysing the consumer behaviour and preferences, companies tend to
bring innovative product in the market to switch the customers to get competitive
advantage. Woolworths can also bring innovation in its products such as it can add Asian
cuisine to its food menu to attract those customers who belong to Asian countries and
living in Australia.
 Diversified consumer preferences : In the Australian retail supermarket, there are
multiple choices available to the customers due to the presence of other competitive
retailers such as Walmart, Big Bazaar, Cole Group etc. that create diversified preferences
of customers in the market. So, marketers of Woolworths need to analyse the diversified
consumers' preferences to develop effective marketing strategies for getting competitive
advantage in the Australian market.
 Deciding channels of distribution : Consumers are benefited by channels of distribution
such as by retail stores and online stores as it produces variety of desired products to the
consumers to choose from (Kastanaki and Giannis, 2022). Channels may also help in
lowering some of the consumer product prices. Woolworths also provide its customers e-
commerce experience through the online store named as “Every day Market” that also

supports home delivery and serve as an effective channel of distribution for the
customers. So, by analysing the consumer behaviour facilitates the businesses in deciding
effective channels of distribution.
Application of consumer behaviour in marketing
When businesses analyse the consumer behaviour of their target audience in the target
market segment, it helps them in deciding about their marketing strategies by examining the
trends of market and needs, wants and preferences of the customers. Some of the points that
describe application of consumer behaviour in marketing are explained hereunder in context with
Woolworth :
 Identifying market opportunity : The study of consumer behaviour helps the
businesses in identifying the unfulfilled needs of customers by analysing the market
trends, consumers' lifestyles and income levels. This helps in identifying the unsatisfied
needs of customers that businesses can further focus on to improve. Woolworths deal in
wide range of products such as beauty, health and home products etc. So it needs to
analyse the consumer behaviour to satisfy their needs accordingly.
 Selecting target market : Analysing the consumer behaviour and market opportunities
will facilitate identification of distinct and target customer segments with unique and
specific needs and preferences. Identification of these consumer groups and their
behaviour , their purchase decisions provides the marketer with useful information to
market and promote the products that suit their wants and preferences (Šimek and
Sadílek, 2022). In context with Woolworth, some consumers prefer sachets of cream
instead of big packs, so the company needs to introduce the product accordingly by
observing this consumer behaviour of its target audience.
 Deciding appropriate marketing mix : Marketers need to conduct consumer Behaviour
Research after identifying the satisfied or unsatisfied needs and wants of its target market
audience. The research is conducted for determining the appropriate mix of product, price
distribution and promotion. For deciding the marketing mix strategy, Woolworths is
required to scan the trends of its target market and audience that mainly consist of age
group of 20-40 to analyse consumers' lifestyles and growing influences.

Social, Cultural and Economic factors contributing to the emergence and Expansion of modern
consumer behaviour
Apart from the general factors that impact the consumer behaviour, there are some
specific factors i.e. social, cultural and economic factors that contribute to the expansion of
modern consumer behaviour. The most frequent factors that influence consumer behaviour
include Marketing Campaigns that affect their purchasing decisions, Economic conditions,
Personal Preferences like fashion, values etc. Group influence, Purchasing power etc. It helps the
marketers in determining better marketing strategies. The specific factors that contribute to the
emergence of consumer behaviour are discussed below :
Social Factors
To understand the buying tendencies of customers , companies need to make efforts to
study consumer behaviour. There are various social factors influencing consumer behaviour.
Some of them are mentioned below :
 Reference groups : Individuals in the society have reference groups that they compare
themselves with. They are known to some people who can be their co workers, family
members, friends, neighbours, relatives, colleagues at the workplace etc. It is basically a
group that the individual wants to get associated with to become member of that group
(Li and Tsai, 2022). It has been analysed that the members of the reference group have
common buying behaviour and also have a great influence over each other. So, the
marketers of Woolworth must identify the roles of reference group that have influence on
others such as Initiator, Influencer, Decision-maker and Buyer for analysing the
consumer behaviour.
 Family : The family members have an essential role in influencing the preferences and
behaviour of the individual. Family develops the environment where the individual
develops with the personality and values. Family can affect the buying behaviour by
influencing the beliefs, characteristics and attitude of the individual or by influencing the
decision making of the individual in terms of purchase of products and services (Albanna,
Alalwan and Al-Emran, 2022). Interaction with spouse and number and ages of children
also determine the buying behaviour of individual. So, by effective market research and
surveys or through social media interaction or by its website i.e. www.woolworths.com,

Woolworth can obtain the information regarding its target audience to identify their
unsatisfied needs by analysing consumer behaviour.
 Role in the Society : The position and role of individual in the society also play a crucial
role in influencing the buying behaviour. The person having high status and role in the
society tends to spend more on leisure products and are mostly price insensitive and those
belonging to lower or middle class category or have low status in the society prefer to
buy the required products and are price sensitive. So, the marketers should endorse the
products and services analysing the social status and and position of the individuals of its
target market. So, the company Woolworths must also analyse the social status of its
different market segments and target audience of each segment and supply the products
accordingly by analysing their behaviour based on social factors.
 Educational level : The high education level of the individual facilitates in making
prudent purchase decisions. The preferences of individuals change with the increased
level of education. It also provides convenience to the businesses as they are able to
provide required information about the products' use and its benefits perceiving the good
educational level of its customers. It provides convenience to the company in analysing
consumer behaviour of its target market in a convenient way. Woolworth primarily aims
at high-income groups and its customers segment consist of educated customers that
provide convenience to the company in understanding their buying behaviour an
preferences.
 Group Communications through opinion leaders : Opinion leaders are the individuals
with expertise and specialization in specific areas. Customers frequently seek their
opinions for buying products and services (Tajeddini and et. al., 2022). For example, IT
specialist for providing consultancy regarding purchase decisions of computer brands will
support the customers. So, companies also make communication and interaction with the
opinion leaders to have the understanding of buying behaviour and purchase decisions of
the customers. So, Woolworths shall also develop connectivity with opinion leaders to
know the buying behaviour of is customers as it deals in wide variety of products
including electronics that customers need to obtain information about thorough opinion
leaders.

 Lifestyle : The lifestyle of the individuals also affect their buying behaviour. It is a way
in which the individual lives in the society. The buying behaviour is highly influenced by
the lifestyle of individuals (Bu, Parkinson and Thaichon, 2022). For example, a person
may prefer to buy healthy products, some customers do not prefer beauty products due to
natural skin care etc. It needs to be considered by Woolworths as it deal in beauty and
health products that have influence on consumer buying behaviour. All the above social
factors have great influence in contributing to the emergence and expansion of modern
consumer behaviour.
Cultural Factors
Cultural factors have significant impact on the buying behaviour of individuals.
Individuals have different principles, beliefs and habits that they create and develop from the
family background and status. It makes clear that why the products of company are being sold
well in some regions due to the culture adopted there. By this, companies can analyse the buying
behaviour based on the culture of its different market segments and can develop the marketing
strategies accordingly. In context with Woolworths, it must identify the impact of below
mentioned factors on buying behaviour of its target customers :
 Culture : They have strong influence on the buying behaviour of customers. They
include the basic values, wants, needs, preferences and behaviours that are developed by
the consumer from their family members, reference groups and other important people
around them. There are different kind of people belonging to different cultures or
religions , affect of which can be seen in their buying patterns. For example, most
Muslims prefer covered dresses and not western dresses. Also, there is different culture
adopted while making purchase of food products. As Woolworths deal in food , clothing
and health products, it needs to consider the culture of its different customer groups and
serve products accordingly.
 Sub-Culture : In a cultural group, there are many subcultures that share the same set of
beliefs , customs and values. The subculture consists of individuals from different
religions, castes , nationalities and geographies etc. These subcultures form a customer
segment (Pantano and Willems, 2022). As regards Australia, its major religion is
Christianity with major denominations lie Catholic, Anglican etc. So, Woolworths need

to consider these factors and offer its products according to the prevailing culture so as to
increase its sales. The individuals who have strong subcultural identity provide
convenience to the organizations in understanding their subcultural language and thereby
the subcultural needs to analyse consumer behaviour by satisfying those needs. The
dressing style, food preference and other preferences differ according to the different
subcultures of people living there in Australia. So, Woolworths needs to consider this as
it deals in wide variety of products that are procured by people belonging to different
subcultures that are part of its target market.
 Social Class : The society in a particular country or region has a particular form of social
class. The social class of individuals is determined by their income level, occupation,
family background, education level and location of residence (Brandão and Popoli,
2022). It helps the businesses in analysing the consumer behaviour. For marketers, social
class is a very useful cultural factor in determining the segmentation and targetting so as
to analyse the consumer behaviour to satisfy the needs and preferences of targeted
customers. For example, if a marketer targets the upper class income group, it is required
to offer differentiated and quality products but the target is middle or lower income
people, company can offer products at reasonable prices to attract consumers of all social
classes.
Economic Factors
The buying behaviour of customers is highly influenced by economic condition of a
country or a market. Due to the strong economic condition of a nation, its money supply is also
strong that provides the strength to the purchasing power of customers. A poor economy has
weak market that creates unemployment and leads to low purchasing power of the customers that
eventually impact the purchasing-decisions and buying behaviour of the customers. In context
with Woolworths, the following economic factors are the major contributors to the emergence of
modern consumer behaviour :
 Personal Income : It refers to the disposable income of people that is left after spending
on the necessary needs of the individual. The individuals with high disposable income
have high purchasing power and they are desired to spend it on various preferred items
(Charters and et. al., 2022). It affects the buying behaviour of the customers in terms of
their purchasing power. In context with Woolworths, it has a market presence in the

Australia that is a highly developed country with a strong market economy. The major
percentage of the customers of Woolworths comprise of high purchasing power.
 Family Income : It refers to the sum total of all members of a particular family. When
the number of money earning members is more in a family, it leads to the shopping of
more desired or luxurious products. It creates the opportunity of buying more that
eventually reflect on the modern buying behaviour of the customers. In context with
Woolworths, it can analyse the consumer behaviour by conducting market research of
different income groups so as to analyse their buying behaviour.
 Consumer Credit : When the customer is provided with easy credit, it facilitates more
spending from the part of customers. Companies offer customer credit in the form of
credit cards, instalments, bank loans etc. When customers are provided with higher credit,
it facilitates the increase in purchase of luxury items (Wooten and Rank‐Christman,
2022). So, company can analyse the behaviour of customers by offering customer credits.
Woolworths provides credit cards to its customers and also provides platinum benefits
and complimentary insurance etc. that help the company in understanding the behaviour
of its customers by facilitating more buying decisions due to the ease in availability of
credit.
 Liquid Assets : These refer to those assets that can be converted into cash more quickly.
For example, cash in hand, securities and bank savings etc. The consumers who possess
more liquid assets spend more on the comfort and luxury products. High liquid assets
encourage the customers to buy more luxury products. In context with Woolworths, as its
target market consists primarily of high income group people, they are considered to have
more liquid assets that encourage more buying of company's product.
 Savings : When the consumers prefer to save more income, it leads to less expenditure
towards buying. While less savings will lead to to more buying preferences. So, the
buying behaviour of consumers depends on their tendency of savings as well (Faghih,
Vahabzadeh and Danesh, 2022). To determine the economic factors that affect or
contribute to the buying behaviour of an individual, Woolworths must conduct economic
surveys to determine the level of income of people and their savings etc. to analyse
consumer behaviour and so as to encourage more buying.

CONCLUSION
From the above discussion, it has been concluded that consumer behaviour plays a vital
role in determining the marketing strategies by the companies. It facilitates better decisions
regarding appropriate mix of marketing such as price, product, distribution and promotion. The
study of Consumer behaviour helps the businesses in determining the pricing policies, decisions
regarding sales promotion and in identifying market opportunities by identifying unsatisfied
needs of its target customers. There are many factors such as social, economic and cultural
factors that affect and contribute to the emergence and expansion of modern consumer
behaviour. In context with Woolworths, it has been able to analyse the modern consumer
behaviour and in developing the market strategies accordingly due to which it has been
considered as one of the top contributor to the economy of Australia.

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