Consumer Behaviour and Insight: A Report on Maggi Noodles

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CONSUMER BEHAVIOUR AND INSIGHT
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Contents
INTRODUCTION............................................................................................................................. 3
LO1.................................................................................................................................................3
STAGES OF CONSUMER DECISION MAKING IN SELECTING MAGGI NOODLE.............................3
IMPORTANCE OF MAPPING A PATH TO PURCHASE AND UNDERSTAND CONSUMER DECISION
MAKING..................................................................................................................................... 5
HOW MARKETERS RESPONDING TO DECISION-MAKING PROCESS............................................6
LO2.................................................................................................................................................7
DIFFERENCE BETWEEN DECISION-MAKING PROCESS OF B2B AND B2C....................................7
APPROACHES AND METHODS TO MARKET RESEARCH USED FOR UNDERSTANDING THE
DECISION-MAKING PROCESS IN B2B AND B2C..........................................................................8
DIFFERENT FACTORS INFLUENCING DECISION-MAKING AND BUYING BEHAVIOR..................10
LO3............................................................................................................................................... 12
INFLUENCE OF MARKETERS AT DIFFERENT STAGES OF DECISION-MAKING PROCESS OF B2B
AND B2C WITH REFERENCE TO METHODS AND MODELS APPLIED..........................................12
CONCLUSION............................................................................................................................... 14
REFERENCES.................................................................................................................................15
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INTRODUCTION
Consumer behavior is a detailed study of how individual or group of individuals purchase
products or services to satisfy their needs and wants. The behavior of consumer before, after
and during purchasing the product or services includes in the study of consumer behavior. In
other words, it is the study of how consumers purchase, dispose or consume the product or
services (De Mooij, 2019). The marketers of the companies try to identify their actions and the
reasons behind their actions so that it becomes easy for them to manufacture and sell their
products or services. Even companies invest huge funds in their R&D to understand the nature
and behavior of consumers. Similarly, Maggi Noodles of the Nestle also conduct deep research
for understanding the buying behavior of B2B and B2C consumers. It is an instant noodle and
loved by several people. The Nestle committed with a society that it will serve the quality of
food and life through contributing to a healthier future (Godey et al., 2016).
LO1
STAGES OF CONSUMER DECISION MAKING IN SELECTING MAGGI NOODLE
It is very vital for marketers to understand the way the consumer thinks and decides to buy a
specific product or services. This process is not only important for the manufacturer but also for
the retailer. The stages of this process are as follows:
Step 1: Need recognition
At the first stage, the consumer recognizes the need for a product i.e. Maggi noodle. The
consumer may feel hungry or something which helps in satisfying small hunger instantly. The
need for Maggi noodle can arise at any time i.e. night, morning breakfast or even in the
evening. Therefore, Nestle manufactures a product which can be prepared instantly and satisfy
the need (Huang and Benyoucef, 2017).
Step 2: Search of information
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The consumer collects information about close substitute products which can satisfy his needs.
In this situation, the consumers rewind his prior experience, receive word-of-mouth from
friends or colleagues, and evaluate the positive and negative aspects of the product related to
taste, health and others.
Step 3: Evaluating alternatives
The consumer assesses different alternatives which are available in the market based on
quality, taste, size, and most importantly price and so on. These elements help in taking the
decision and selecting the best product as per their needs (Ashman et al., 2015).
Step 4: Decision for purchasing
The consumer deeply analyzes the information and then finally decided to buy a product. The
consumers put some logics at the time of evaluating different alternatives. For instance, some
consumers think that Maggi noodle is tastier than others; it is available in different sizes so that
it becomes easy to pick the size as per the requirement and so on.
Step 5: Post behavior purchase
The consumer puts their reviews and feedback in this stage, which decides the user status such
as ex-user, potential user, loyal user and many more. If the consumer is satisfied with the
product only then he will again purchase the product and if he will do not then switch to other
brands (Haugtvedt et al., 2018). The customers experience affect the image and reputation of
the brand.
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Figure 1: Consumer decision-making process
[Source: Old union, 2019]
IMPORTANCE OF MAPPING A PATH TO PURCHASE AND UNDERSTAND
CONSUMER DECISION MAKING
Consumer mapping
Need identified Initial awareness Alternatives Selection and
purchase
Post-
purchase
experience
When an
individual needs
some snacks to
satisfy his hunger
Looks at
advertisements of
different brands
Searches different
alternatives such
as chapatti noodle,
Ching’s instant
noodle, and
Yippee noodles
and so on.
Select the product
according to size,
price, quality and
taste and selects
the most
appropriate
noodle
The customer
feels
delighted
after tasting
the Maggi
noodle and
may become
a loyal
customer.
Importance to marketers
Consumer mapping is a way the consumer decides to purchase the product. In includes
different steps which help the consumer in the decision making the process. It assists the
marketers in identifying the customer touchpoints which will increase their customer
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experience and identifying the factors which are essential to complete the purchasing order.
The importance of the marketer in mapping a path to purchase is as follows:
 Faster sales cycle
It helps in enhancing the sales cycle of the Maggi noodle and this can be ensured by
streamlining every approach of customer engagement. From customer mapping, the
marketers identified roadblocks or hurdles faced by the customers in purchasing the
product. The nestle work for identifying those hurdles and develop strategies to remove
them so that they can easily share that information with the customers which directly
helps in increasing the sales (Lemon and Verhoef, 2016).
 Integrating customer data
In the current scenario, the companies are developing the strategies to collect the
customer’s data and then use it to identify the nature and behavior of the customers at
the time purchasing a product or service. The consumer data is not only beneficial to
identify the consumer behavior at the time of purchasing the product but it is also used
after selling the product for cross-selling or up-selling of related products or services.
 Better ROI through improved targeting customers
Customer mapping helps the organization to collect and understand the consumer in a
better way. This information will help them to better utilize that information for sending
personalized messages and maintaining a long-term relationship with them. Personal
interactions with the customers will offer real value to them and they will never think to
switch other brands (Bradlow et al., 2017).
HOW MARKETERS RESPONDING TO DECISION-MAKING PROCESS
In order to effectively respond to the consumer decision-making process, it is essential that
organizations should focus on taking effective decisions. To achieve this, the marketers can
highlight on developing effective marketing mix as well as new technologies to significantly
impact on consumer decision-making the process. Following are the models which help the
marketers in responding to the decision-making process:
Rational model
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The decision of marketers in this model means choosing different alternatives after applying
some logic, analysis and it will be objective in terms. It consists of following the formal
procedure of activities that starts from developing an objective, preparing strategies to achieve
it, identifying and evaluating different alternatives, and then analyze them to take the final
decision. This model assumes that the person has complete information about the product
(Cascetta et al., 2015).
Increment model
In this model, the marketer develops and focuses on achieving the short-term goals so that it
will help in fulfilling long-term objectives. However, this model does not require complete
information.
Garbage can model
This model states that the decision-making process starts from within organizational behavior.
The solutions of the problem come from the garbage can i.e. the place where the solutions and
problems are already dumped which are of no use. But now in order to come at a particular
solution, the management find ways from a garbage can (Zhu and Kindarto, 2016).
LO2
DIFFERENCE BETWEEN DECISION-MAKING PROCESS OF B2B AND B2C
The products of the Nestle distribute from both these channels i.e. B2C and B2B and the
meaning and differences of both these channels are given below:
B2B: In business-to-business marketing, the marketers sell the product to a third party rather
than final consumers. The main focus of the company is on the product and its features. The
buyer does not have any personal attachment with the product or seller (Graham and
Mudambi, 2016).
B2C: business-to-consumer marketing means the manufacturer or retailers directly sell the
product to final or end consumers. Some companies only focus on selling the product to end-
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users because of its several benefits and it is also used to differentiate it with other alternative
products.
However, the buying procedure of end consumers and the third party is different which can be
presented as in the below table:
Basis B2B B2C
Meaning If the selling of goods and services
is between the two organizations
then it is known as B2B.
If the goods or services are sold
between end consumers and
organization then it is known as B2C.
Nature It is one-to-one marketing and it is
easy to recognize the buyers and
build and maintain a relationship
with them (Nath et al., 2019).
It is one-to-many marketing and
large companies are not able to
identify the customers and even they
cannot easily access.
Focus Building and maintaining a
relationship
Selling products and services
Generating brand
value
Brand value is generated with a
mutual and trust relationship
Brand value is generated through
promotion and advertising strategy
Decision-making
process
It is a longer-decision making
process and the decision-maker is
involved in this process.
It is a comparatively short process
and it is not compulsory that the
end-user personally should involve in
this process
Buying-decision Logical and planned, it is also based
on the needs
It depends on the individual desire
and wants
Quantity of goods Large Small
Example Selling of Maggi noodle from
wholesalers to retailers
Selling of Maggi noodle from retailers
to customers
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APPROACHES AND METHODS TO MARKET RESEARCH USED FOR
UNDERSTANDING THE DECISION-MAKING PROCESS IN B2B AND B2C
Market research for B2C customers
The market research for B2C customers is divided into several categories and the decision of
selecting the best one depends on the time and resources available with the marketer. This
research highlights the nature, attitude, and behavior of the customers and also in their
decision-making process. Following are the 5 approaches available to identify consumer
behavior and the Nestle can choose any one of this as per their knowledge they want to gain
from the research:
1. Surveys
In this method, the researcher directly asks some questions with the respondents. The
respondents and target market were selected by the researcher because the reliability
and validity of the data depend on the type and size of a sample population. This is
further classified into several categories which are as follows:
 When the researcher directly communicates with respondents then it is known
as an in-person interview.
 When the research is taken on the telephone then it is called a telephonic
survey.
 When the researcher gathers the information by taking the help of internet then
it is known as an internet survey.
2. Focus groups
As the name indicates, it is done in a group where the researcher gives one or different
topics to people and these people discuss on that topic. Minimum three people are
involved in this survey (Kiessling et al., 2016).
3. Personal interviews
This survey is a subjective method where the outcome of the research is subjective in
terms because the researcher uses his opinions and experience in taking out the results
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of this survey. This method gives valuable information about the consumers and it also
includes the main issues in this product.
4. Observation
The researcher may or may not inform the respondents that they were under the
observation for a particular survey. This result helped in predicting the correct picture of
the habits and preference of consumers.
5. Field trails
Field trials can be suitable at the fairs or stalls where the researcher can prepare the
Maggi and offer to respondents. Their feedback will help the company to make
necessary amendments in the product.
Market research for B2B customer
The company faces several difficulties and complexities while analyzing the nature and behavior
of B2B customers but the researcher of Maggi noodle can conduct the same by following some
marketing approaches:
1. Competition research
In this market research, the researcher analyzes the strengths and weaknesses of
Maggi’s competitors and then compares it with Maggi to analyze the actual situation.
The factors included in this analysis are financial, commercial, geographical, and even
factors of customer satisfaction.
2. Qualitative interviews
In this research, the experts of the industry share his expert opinions and advice with
the company so that they can use it to identify the nature of the businesses. Nestle hires
full-time experts which help them to collect information related to B2B market (Grewal
et al., 2016).
3. Environmental research
This includes all other factors which affect the decision of businesses such as tax policy,
economic conditions, legal structures as well as other regulations. All of these factors
affect the purchase decision of marketers.
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DIFFERENT FACTORS INFLUENCING DECISION-MAKING AND BUYING
BEHAVIOR
The factors influencing the decision-making and buying behavior of the consumers are as
follows:
1. Cultural factors
Cultural factors are an unavoidable part of every society and it affects the needs and
behavior of every individual. The culture of every country is different from other
countries and it is essential that Nestle should analyze each culture before launching the
product.
 Social-class
It is a homogenous group which follows the same interest, lifestyle, values or
behaviors. These groups were formed as per the attitude and purchasing
decision (Maniatis, 2016).
 Sub-culture
Sub-cultures include the people having similar values based on their experiences
or lifestyle. For instance, the sub-culture of Christian people is different from the
sub-culture of the Hindu people.
2. Social factors
Social factors include outside factors i.e. society which affects the decisions of
individuals and group of individuals. This was further categorized into:
 Reference groups
These groups include those members who are related to an individual's origin
such as people from the origin, work, hobbies and many more. For example, the
person will start eating the Maggi if his younger family member was eating.
 Family
This is the most significant factor which shapes the behavior and attitude of an
individual at the time of making the purchasing decision. For instance, if the
financial condition of the family is weak then either he will not purchase Maggi
or buy it of small size (Wang and Yu, 2017).
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 Status and roles
The role and status of an individual in society also defines the consumption and
behavior of an individual towards the product. For instance, the individual
having low purchasing power even purchase the Maggi due to its low price.
3. Personal factors
The individual traits, features, and characteristics also affect the decision-making
process. Other personal factors are as follows:
 Age
The demand for Maggi is also affected by the age group of the buyer. For
example, the children and youth between the age group of 6-25 years prefer to
buy more Maggi as compared to others.
 Economic conditions and occupation
The financial conditions and occupation of the individual also affect the
purchasing-decision of an individual. For example, if the financial condition of an
individual is good then he will prefer to buy more expensive goods.
4. Psychological factors
The marketer should also analyze the personal attributes of an individual and the person
who helped him in making a decision. The person involved in this process also affects
the purchasing decision.
 Perception
It is a mental procedure in which the buyer selects and interprets the product as
per his knowledge. In other words, it includes the individual’s reaction after
watching a product (Lim et al., 2016).
 Motivation
The requirement of the product defines the motivation level of consumers
which has a direct impact on the consumer purchasing decision. If an individual
has a strong desire to purchase the product then he will buy the product at any
cost and vice versa.
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