This report has been designed to provide an understanding of the concept of the social influence impact product and brand purchase decision at all stages of the consumer purchasing decision process. In this context, the country of Australia has been chosen and a critical analysis has been conducted on Australian consumers. Australia is a developed nation and their standard of living is high. Therefore, they shows-off branded items and stick on it. This report contains two number of question. In this report, it discusses social influencing factors such as culture, social classes and reference groups. It also explains its impact, which affects behavior of the people. It discusses on several marketing strategies such as 4Ps, targeting and market segmentation.
Social influence can be defined as a change in a person’s behavior due to other’s viewpoints, sentiments, or attitudes. Generally, it can be said that it is an external factor, which transforms the mentality of people. Social influence is a very important to study while studying customer behavior because these factors affect the behavior and decision of the people. These social influences include culture, reference group, social classes, customs, traditions, beliefs and religious factors. These factors also influence the purchasing behavior of the people (Wren, 2013).
Culture: Cultural factors are also influencing the behavior of the consumers. It describes, how individual behave in a different way. Cultural factors include religious, status, and gender. Culture of Australia is very fond of living a cheerful lifestyle. The youth of the Australia is passionate about the fashion and style. Therefore, they are not thinking about the price of the product. They just focus on the quality of the products (Santander, 2017).
Social classes: Social classes are also affecting the behavior of the consumers. Mostly, social classes classified into three categories like upper, middle and lower class. Australia has known for its high standard of living. Therefore, the people of Australia are highly influenced by the social classes and mostly, they prefer branded and New Technological Products.
Reference groups: Reference groups are the collection of the peoples, which affect the belief, view, behaviors, and mindset of the individual. Reference groups include the family members, friends, celebrities, clubs, and religious groups. The people of Australia are mostly influenced by the fashion and style of the celebrities and idol person (Sokolowski, 2013).
Impact of Social Influences on Purchase Decision Process of Consumer
Behavior and preference of the people differ from person to person, which influence the buying attitude of the customers. In buying decision-making process, there are five stages, which mostly has considered while purchasing the goods and services. These five stages are problem/need detection, information search, evaluation of alternatives, buy decision and post- purchase behavior. In first of stage of buying decision-making process, the person has to identify what are his needs and wants and how to get them fulfilled. The people of the Australia also identify its desire and requirement. If their needs and wants have not been fulfilled then they import such products and items from outside. The culture and reference groups also influence the needs and wants of the Australian peoples (Ferrell et al., 2014).
Mostly, people influences from their favorite celebrities when they buy clothes or any accessories. In Australia, most of the people prefer wines, therefore it is a need of the people and Woolworth has recognized such needs and provided wines in various varieties to the people of the Australia. The second stage of consumer buying process is searching for various alternatives, which can fulfill their needs and wants. Both culture and reference groups are affecting the view of the customers. Mostly customers are taking advice from his relatives or friends while they are purchasing new products or services. The reference groups’ help the customers to provide information related to product or services, which they opt (Bruwer, 2014).
Evaluation of alternatives is the third stage of consumer buying process. In this stage, consumer identifies or evaluates the best alternatives among the various alternatives. In Australia, there are several people prefer bread in their foods. Woolworths provides varieties in bread such as Woolworths Bread Rolls Soft, Woolworths Bread Four Seed Loaf, Iced Finger Bun Extra Soft and Woolworths Mini Hot Cross Buns, which fulfill the desire of the various customers (Woolworths, 2017). Mostly Australian people prefer bread with seafood because it is the culture of the Australia.
The consumers take the purchase decision on the basis of above three stages. The purchase decision has also been influenced by cultural and reference groups. The people of the Australia mostly follow western culture and they live accordingly. Mostly Australian people consume packed foods because their daily routine is very busy and they cannot prefer to make food at home. Therefore, Woolworths serves various products in different segments such as fruits, Easter, bakery, meat, seafood, deli, pantry, international food, drinks, beers and wines (Woolworths, 2017). Post-purchase behavior is a fifth and last stage of buying behavior process. This stage shows behavior of the person after buying the goods and services. The people of Australia are brands conscious. Mostly, Australian people purchase high price item for showoff purpose. The reference groups are also influenced to buy high price goods and services because these goods and services match the status of the Australian people. For example, if a person buys t-shirts of Zara, but his friend suggests him to buy another brand instead of Zara, it will influence the social status of that buyer and he will make up his mind to return the product.
Social Influences on Consumer Behavior to Improve Firm's Marketing Strategies
4Ps of Marketing
The 4Ps of marketing is a model, which is used to improve or develop the marketing strategies of the firm or organisation. It is also called marketing mix. It contains four elements viz. product, price, place and promotion. These all elements have been influenced by internal and external environment.
Product: Product is anything, which satisfies the needs and wants of the consumers. Social influences such as culture and reference groups affect the purchasing of the products. Culture factors affect the consumer’s behavior such as taste, color, perception, habits and consumer decision making. For example, generally, it has been observed that Australian people purchase packed foods from the market but they like to cook fish at home with their friends. Therefore, Woolworths provides fish and sauce at a lower price and offer home delivery facility (Woolworths Group, 2017).
Price: Price is a monetary value of the products and services. Price is also influencing the buying decision of the consumers. Australia is a developed country; the people of Australia follow the luxurious lifestyle. In Australia, most of the people carry expensive products and thing for show off purpose. The friends and their family member also encourage him to buy expensive brand items to match the status of the society. Therefore, it can say that social influences like culture and reference groups influence the buying behavior of the consumers (Santander, 2017).
Place: Place is the physical stores where products and services are provided to their customers at different prices (Schindler & Schindler, 2011). The place also has major factors to affect the sale of the company. Woolworths has various supermarkets at prime location. Woolworths follows all new trends to attract the customers. Woolworths changes its products and services and their use in the supermarket according to the festivals and occasion that promote the culture of the Australia. The lifestyle of the Australian people is very hasty, so they do not has to visit in different supermarkets and shops. Therefore, Woolworths develops the virtual market on internet and provides facilities to its customer to buy products and goods online. It can be said that buying behavior of the consumers has changed and they mostly prefer to buy goods and products online.
Promotion: Promotion is a tool to increase the sale of the organisation. It helps to aware the customers, attract the customers, create the sales and create the brand loyalty. It also contains various promotional tools such as public relation, advertising, publicity, and personal selling. Promotion strategies have huge impact on the buying behavior of the customers. Somebody rightly said “the brighter the better”. Woolworths has established its virtual supermarkets in two of the busiest train stations of Australia in order to promote products and goods. These two stations are Sydney Town Hall and Flinders Street station (Marketing, 2012). It also provides the reward points to promote its brands.
Targeting is a strategy in which organizations have targeted a group of customers for marketing purpose. Targeting helps the businesses to focus on specific set of people. In targeting, organisation targets those customers who have similar characteristics such as income, lifestyle, location, and age group because it saves the extra afford of advertising. There are three types of targeting strategies, which are undifferentiated, concentrated, and differentiated (Middleton, 2012).
Undifferentiated targeting strategy is a strategy in which organization uses same promotional message to convey it globally. In this strategy, the targeted audience is whole world. Concentrated targeting strategy is a strategy in which organisation makes message for particular segment. This strategy focuses on single segment. Differentiated targeted strategy is a strategy in which businesses design the strategies to target the different segments with different messages (Lamb et al., 2011).
Woolworths uses all these targeting strategies. However, after analyzing the all these targeting strategies, the company, mostly uses differentiate targeting strategy to convey its different messages in several locations. Woolworths deals in various countries such as Japan, South Africa, New Zealand, China and Canada. Therefore, Woolworths has to design such marketing strategies, which can complement the various cultures of the different countries and consider their social classes and reference groups. For example, Woolworths has established virtual supermarket at two stations to target those people who have no time to buy goods and products from any other place (Marketing, 2012) .
Market segmentation is a method in which marketer separating a business market into small sub-group of consumers based on different characteristics, needs and wants of the people. Generally, market segmentation can be classified on the basis of five factors such as demographic, geographic, behavioral, and psychographic (Dibb & Simkin, 2013). Woolworths is one of the leading brands in Australia. It uses various strategies to enhance its performance. Woolworths is also segmenting its market according to the demographical, geographical and behavioral. It designs its products and services according to needs and desires of middle and upper class families. It also focuses mainly on attracting local people. Woolworths also considers about the culture and reference groups of the people.
In Australia, Woolworths has 39.5 percents of market shares in the segments of liquor (Mcaay, 2014). The organization understands the cultural needs and wants of Australian consumers so it has introduced various varieties of wine and bread to satisfy the desire of consumers. Therefore, it can be said that Woolworths has considered the behavior of the customers and their needs and wants. Woolworths also focuses the lifestyle of the people. Mostly, Australian people are brand-conscious and influenced from the lifestyle of the different people.
According to the above discussion, it concludes that the factors of social influences such as social classes, culture and reference groups are affecting the consumer behavior of the people. Australia is a very prosperous country. Their standard of living is also high. The Australian people are more brand-conscious, fashionable and stylish. Therefore, Woolworths continuously focuses on analyzing the behavior of the Australian people because their behaviors continuously keep on changing. It also concludes about the five stages of the consumer behavior, which are influenced by the cultural and reference group factors of the social influence. It also concludes about the social influences on consumer behavior to improve organization’s marketing strategies such as 4Ps, targeting, and market segmentation.
Woolworths is using all types of targeting strategy. It can be concluded that mostly Woolworths using differentiate targeting strategy for business because different countries have different culture and consumer behavior, which influence the profitability and productivity of the organization.
Bruwer, J. (2014). “Service quality perception and satisfaction: buying behaviour prediction in an Australian festivalscape”. International Journal of Tourism Research, 16(1), 76-86.
Dibb, S. & Simkin, L. (2013). Segmentation Success: Making It Happen!. Abingdon: Routledge.
Ferrell, O.C., Niininen, O., Lukas, B., Schembri, S. & Pride, W. M. (2014). Marketing Principles PDF. Australia: Cengage Learning.
Lamb, C., Hair, J. & McDaniel, C. (2011). Essentials of Marketing. Australia: Cengage Learning.
Marketing (2012). Woolworths launches virtual stores to promote mobile grocery shopping. Retrieved from: https://www.marketingmag.com.au/news-c/woolworths-launches-virtual-stores-to-promote-mobile-grocery-shopping/
Mcaay (2014). Major Alcohol Sales Outlets. Retrieved from: https://mcaay.org.au/assets/publications/industry-guides/mcaay_majorsalesoutlets_feb2014-final.pdf
Middleton, S. (2012). What You Need to Know About Marketing. New Jersey: John Wiley & Sons.
Santander (2017). Australia: Reaching the Consumer. Retrieved from: https://en.portal.santandertrade.com/analyse-markets/australia/reaching-the-consumers
Schindler, R. M. & Schindler, R. (2011). Pricing Strategies: A Marketing Approach. California: Sage.
Sokolowski, O. (2013). Influences and Attitudes Within Consumer Behaviour Process. Munich: Grin Verlag.
Woolworths (2017) Products. Retrieved from: https://www.woolworths.com.au/
Woolworths Group (2017) Strategies and Objectives. Retrieved from: https://www.woolworthsgroup.com.au/page/about-us/our-approach/strategy-and-objectives
Wren, K. (2013). Social Influences. United Kingdom: Routledge.