Name: Emir Polutak Student NBR: S3239098

Consumer Behavior MKTG 5814C

August 10

2012
Assignment 1 Work-OUT (Natural Spring Water) WHO-RAE Corporation.

This document will highlight the challenges of WorkOUT natural spring water combined with theories and practices from weeks 1-7 of the subject consumer behavior. This assignment will help better analyze new target markets for the corporation as well as clarify any future possibilities for WHO-RAE to focus on to better their business, as well as help understand the behavior and thoughts of its consumers in greater detail.

WHO-RAE and WorkOUT water overview

In essence Who- Rae is an entrapeurial company that crates product design, supply and marketing. The products are highly diversified, innovative and can be found over a medium network of major retailers for easy access for consumers. The company also prides itself on its sustainable influence or environmentally friendly commitment and fantastic ability to identify opportunities overseas to bring products first to a new market and maintain steady sales records. The products under analysis in WorkOUT natural spring water , though a basic necessity in life water can be positioned in many different methods to attract an wide array of different target markets, demographics and type of consumers. The Brand WorkOUT spring water is unique in the sense that it carries the brand reputation and image of one of the highest known personal trainers in Australia Shannon Ponton.(1) 6 series Biggest Looser trainer is a prominent figure in the personal training industry, carrying such a recognizable and famous person on the label of the water brings tremendous image to the water, adding credibility, reputation ect. to consumers perception when deciding whether or not to purchase a bottle of water (2). The main aim of the organization is to constantly evolve its products design, build its brands reputation, increase sales through distribution and marketing. The aim of this document is to carefully analyse what Who-Rae is currently deploying in its marketing, distribution and design efforts for its brand WorkOUT water in the hope to find new ideas through the study of consumer behaviour to identify what the company is doing right/wrong or what could be done in a more efficiently manner.

Reference : 1 http://www.who-rae.com.au/our-vision/
2 http://www.who-rae.com.au/shannan-ponton/

Bottled water market and industry analysis: According to IBIS world bottled water in Australia is a highly profitable and slowly increasing industry. According to the 2011-2012 report bottled water is a 600 million dollars annual industry in Australia, with profits at 69.7 million and annual growth at 0.2% (1). Completion levels are high, industry assistance is medium, possibility of replication very high and regulation level medium. The main purchases also come from supermarkets on a regular basis; also retailers are the most important source of immediate sale for producers in the industry(2). Another important consumer trend is the ever growing sustainability or environmentally conscience movement where consumers are now becoming more purchase savvy and demanding more eco friendly initiatives from corporations. Contribution of PET plastic bottles to landfill and the unnecessary carbon emissions generated by the production and transportation of bottled water have weighed on sales in recent years. Increased health concerns from soft drinks and sugary beverages has also helped increased the sale of bottled water. Profitability and sales outlook look very strong for the years 2012-2015 with the industry set to grow by 0.3%(3).

Refrence: IBIS pages 1. 4 pg 2. 5 3.6 Marketing mix WorkOUT water:

Product (Range): 1. 1L bottles with pop cap lid for easy consumption. 2. 500 Ml screw cap bottle. Price: 1. 1L bottle $2.50-3 depending on store or retail location 2. 500 Ml bottle $1 average price. Workout water is priced below all the major competitors due to high market competition due to the lower brand reputation of the product and smaller availability in retail stores across Australia. Place (Distribution) 1. 2. 3. 4. 5. KMART. Priceline stores. Target (subject to availability/ seasonality) Big W (subject to availability/ seasonality) Woolworths (subject to availability/ seasonality)

Promotion: 1. Utilizing brand of personal trainer Shannon Ponton from the biggest looser using him as a spokesperson.

Target markets and consumer segments Primary: The primary market for the Pricelines store located at Bourke street Melbourne is women aged 19-45 working in the surrounding office buildings and nearby universities. These women are busy and mature individuals who seek to travel short distances to acquire ancillary items from the Priceline such as makeup, beauty goods healthcare products and offcourse confectionary and beverages e.g WorkOUT water. Secondary: Males aged 27-35 who seek to buy products for their female partners that have sent them to purchase goods on their behalf, as well as purchasing small gifts such as perfumes, already wrapped gifts for female friends or partners. The other purchasing patterns include buying confectionary and cheap beverages.

1.what is CB

Consumer behaviour (WorkOUT water and Who-Rae) Consumer behaviour is about value seeking activities that take place as people go about addressing realized needs. In the case of WorkOUT water the basic consumption process is as follows need-want- exchange- cost and benefit-reaction and value. WorkOUT water can be classified as a low cost ancillary item bought on sheer unrationality merely on sight, consumers are not likely to travel long distances for a bottle of WorkOUT water due to the many substitutes available on the market. The need in this case is to quench ones thirst , the want for the target market is a product that is not only appealing in appearance, feeling when held in ones hand, brand status and overall taste. The exchange will be swift with consumers not worry alot over a $1-3 for a bottle of water. The cost justifies the benefit greatly in this product with consumers unlikely to toss and turn ideas in their mind whether or not this product will be beneficial to consume. Reaction will wary amongst consumers but overall the taste of the water would determine whether or not the buyer will repurchase the brand again(1).

Reference: Book consumer behaviour Babin Harris: pgs 4-5

Economics and consumer behaviour: The economy is a great factor in determining the consumption levels of consumers, stimulus like employment levels in Australia, GST, rise in taxes, levels of disposable income and government legislation are ever-changing and are necessarily to understand the financial circumstances of consumers of WorkOUT bottled water. Because Bottled water is such a low cost and a necessary product in our everyday life, I believe that economic factors play a small-medium role in the consumption patterns of consumers.

Psychology and social psychology: Social psychology of buying WorkOut bottled water entails when someones is the Priceline store their friends or environment they are in play a great deal whether or not to purchase the brand significantly. An example of this would be if the lady at the counter suggest to buy the water, if others around them are talking about the water or purchasing it in front of them. How their feelings and thoughts relate the brand of the water and how it makes them feel e.g. Happy, thirsty, importance, power. Cognitive psychology of the brand deals with what is going on in the consumers mind, does advertising from the Biggest looser appear in their mind, did the consumer remember a previous time they consumed that brand and where they happy with their purchase ect. Marketing: Consumer behaviour and marketing are very closely related fields, as touched on earlier the most vital part of the brand is the marketing of the personal trainer Shannon Ponton when consumers see that a person from the fitness industry as renown as he is endorses this product their immediately trigger the water to be of higher health value and will psychologically trigger the buyer to consider purchasing it. Another methods utilized by Priceline is to place the product near the cashier to allow consumers to make a last minute purchase. This is done by placing the product near a cut out of Shannon Ponton on cardboard shelving promotional rack. Competition and customer orientation: The ways in which consumers are treated seems irrelevant because the product is designed to cater for a large variety of consumers and markets segments. Treating s customer well in a store or special will not motivate them or discourage them to buy a bottle of WorkOUT water.

Different ways of doing business: The method of marketing the product WorkOUT water is undifferentiated marketing where the basic product is offered to all market segments.

Different ways of studying consumer behaviour: The approach utilized by Priceline and WorkOUT water in the methods interpretive research is to conduct focus groups and surveys to determine the meanings and motivations associated with specific consumption experiences. Quantitative research: Includes using loyalty cards e.g Priceline rewards cards to record data on purchasing paters and time of purchase to make statistical conclusions of the consumer paters of buyers. Another would be analysing consumer markets and segments in determine where to stock the products , what income, age, gender buys the product to create a more appealing product for these segments. Qualitative research: This would be observing customers in store with camera analysing their body language and physical movements. Take small samples of the market and conduct interviews asking indepth questions, testing their motives or thoughts eg. Of why they consumer, where, when ect.

2. Value and the consumer behaviour value framework

Types of value for WorkOUT water: Value (what you get) Quality clean water Convenience many retail stores to buy the water from Prestige people acknowledging your bradn of Workout water and thinking your a fit athletic person that takes their health seriously.

What the consumer gives Time: small amount of time travelling to store and lining up to purchase the good Money: $1-3 of their money for the product. Emotions: Happiness , fulfilment , joy , status. Image: Seen as a person that cares about what they consume, drinking water instead of soft drink or beverages that fill your waist line.

Utilitarian value: Workout water is utilitarian value meaning it helps accomplish a task which is to quench ones thirst with a beverage. Its a basic need that is accomplished in the purchase of this brand.

Strategy (creating value)

Corporate strategy (WorkOut water) The corporate strategy for Who-Rae and work out water is setting itself out from the rest, this is done by utilizing brand ambassadors such as Shannon Ponton , adopting sustainable initiatives, differentiating its products by design and unique usability. Marketing strategy includes: As I described in part one the marketing strategy is utilized well, using tv advertising, direct marketing with promotional offers advertised via email, direct mail ect.

Marketing tactics: Workout waters tactics include Charging lower prices for their water bottles than competitors Distributing their products in major retailers situated near exists and easily accessible areas. Positioning their brand as sustainable products giving back to the community.

Total value concept: WorkOUT water also sells life, health, a better body and joining a elite group.

Market segmentation: According to the Australian Bureau of statistics and the chosen primary target market (Women) by me, the average target market for WorkOUT water is 7.5 million people in Australia. For the secondary target market is calculated as being 3 Million people. References abs: Web:http://www.abs.gov.au/websitedbs/d3310114.nsf/4a256353001af3ed4b2562bb00121564/ca
0b3137794a766bca256f6c0078cb0b!OpenDocument

CLV for WorkOUT water: High CLV customer: Female Single Age 25-34 years Income $50000-75000 p/a Loyalty card holder.

Low CLV customer Male Single Age 19-29 Income 35000-45000 Single channel shopper, and only buys seasonally not constant.

CLV: Female 28 years old purchases WorkOut water on average 4 times a week before training, so on average $208 a year. This customer yields without word of amount over 30 years $6240.

3. Consumer learning starts here, Perception

Exposure attention and comprehension:

Exposure utilized by WorkOUT water: Placing cardboard cut outs of Shannon Ponton near the cashier of Priceline.

Sensation: When watching the show biggest looser this triggers consumers sight sense and reminds them of WorkOUT water.

Attention: Attention is not necessary given most of the time consumers are exposed to these stimuli. Because WorkOUT water has a much smaller advertising compared to its competitors of spots related marketed water e.g pump, Torpedo water ect.

Comprehension: People might also comprehend different marketing messages differently, WorkOUT waters slogan Life is great, Rip into it! Some might perceive it as it was intended to be interpreted to have a healthy and great life and maintain a healthy diet and consumption of water. While others would see Shannon Ponton on the label with the same slogan and perceive him as intimidating all covered in tattoos and the words stating rip into it as aggressive and offensive. It all depends on the person reading it and their own personal level of comprehension.

Application to consumer behaviour:

Exposure Exposure via T.V and in store advertising for WorkOUT water. Drinking WorkOUT water while training on the Biggest Looser.

Subliminal Advertising Drinking work out water while exercising on the show might subliminally place the suggestion that when you work out you must consume WorkOUT water. This is not always the case but people can pick up correlations between the two without noticing directly, by noticing the shape of the bottle and the label. Images of power and weight loss can also be hidden interpret false meaning to consumers, that might think that this brand of water is better for the body than other brands without directly saying so.

Applying JND concept: WorkOUT water aims to differentiate itself by using this practice greatly, it utilizes just noticeable difference by shaping its bottle similarly to Mount Franklin, Torpedo and Blue Mountain spring water. It also gives more value to consumers offering 500ml -1 litre bottles at lower prices. This indicates to consumers that the larger volume of water offered will quench their thirst better while working out because a persons dehydration will be more, thus filling up the water bottle less. Add on purchases are also popular with consumers Priceline seasonally offers 50cents a bottle with selected purchases during the winter.

Enhancing consumer attention (WorkOUT water): Intensity of stimuli: While working out on the biggest looser the stimuli to buy water is huge, sweat pouring, muscles flexing , the person trainer exerting power an dominance over the participants . Powerful images of life changing bodies and emotion are enhancing the consumers minds, as they drink WorkOUT water on the T.V show. Intentional learning: This is truly the case with WorkOUT spring water , the consumer is intentionally learning the benefits of consuming the water through watching the Biggest Looser.

4. Comprehension, memory and cognitive learning.

Consumer comprehension Consumer comprehension Who-Rae needs to work on to increasing its brand image amongst consumers. Currently the organization in my view is not focusing enough on marketing its message clearly enough to customers. Physical characteristics: The intended message or meaning that WorkOUT water is a sport related water is not being correctly portrayed in their marketing. It is merely suggested by consumers watching the biggest looser but not scientifically proven with research and facts. 1 Intensity: the colour of the font and size is not large enough or catches the eye of consumers; the brand needs to focus its marketing efforts on increasing exposure by using larger billboards clearer messages and better colour schemes. 2 Colour: AS mentioned before the bottle shows lighter colours and softer tones of blue and needs to brighten its bottle to make it more noticeable. 3 Font: The font is quite appealing and is very noticeable.

Message receiver characteristics: Intelligence: Consumers of WorkOUT water come from all walks of life and have varied intelligence when it comes to comprehending marketing messages. Involvement: Messages are interpreted at many different involvements with consumers, judging by the marketing messages used by Who-Rae the level of involvement would be quite high. The messages are clear some might be subliminal, but overall the message is live a healthy life drink WorkOUT water while training and stay positive. Familiarity/habituation: Relating the concept of water and training is a common form of habituation when consumers view an add for bottled water. What Who-Rea needs to do is mask its marketing messages and advertisements with different meanings and scenarios. This is because consumers are more likely to reject their message because they have seen the same assimilation of water and training over and over again. Expectations: WorkOUT waters expectations are that if the company markets the water towards fitness and training it will succussed and sell many units. When in reality the main sales come from people seeking to buy water in supermarkets in bulk or 6 packs, and sales from Priceline and other retailers due to the low price and convenient placement.

Making association with meaning. Repetition: Work out water utilizes repletion by charging the same price in stores at constant basic reminding consumer that they will always get the same products at that price rarely changing. Other repletion includes watching the T.V show biggest looser and being reminded of the water product. Dual coding: Life is great, Rip into it! Though not in the form of music, it would be advisable for Who Rae to combine the jingle into a music number. This would greatly stimulate consumers to remember the brand in their everyday life and remind them of the company or brand name. Long term memory: WorkOUT water needs to adopt more semantic coding which means when stimuli is presented to them it can be converted to meaning. A mental pathway or memory trace in which WorkOUT water is remembered by consumers is in the form of seeing anything related to exercise, training, commitment these are all triggers in remembering the water brand. Water is generally associated with thirst quench, or a necessary life source, also the colour blue, and baby blue. This is an example of spreading activation whereby certain images, stimuli or music will trigger consumers to buy WorkOUT water. Social Schemata: Is also highly relevant to WorkOUT, the sales person and environment also play a key role in determining whether or not a consumer will buy the particular product. Because WorkOUT water doesnt directly have a store to train its staff to sell bottled water, it used intermediately retail outlets e.g. Priceline to sell its product. This means that Work out water has to expand its distribution network to more suited environments where products relate more to sport, health and fitness. There the environment will help better sell the WorkOUT water because everything is relating back the brand. Instead of Priceline where beauty products with a few health supplements are sold.

5. Motivation, emotion: driving consumer behaviour

Maslows hierarchy of needs (WorkOUT water): WorkOUT water is in one way a product that can be classified as a hedonic motivation a basic need like food, as human we need water, but living in such plentiful developed nation water is an abundant and easily accessible source. But WorkOUT water in the current Australian Market can also be classified in the belonging category where people feel like their part of a movement or group of unique people who want to live a fit and healthy life. Other Motivations: Self improvement Esteem

Types of involvement: Work out water needs to build it involvement levels with customers, its yet to come with injenuative ways of attracting it customers and keeping their enthusiasm levels high. Consumers dont run into stores asking for WorkOUT water, merely buying the product because of small advertising on T.V or convenience. Marketers for Who-Rae should focus on promoting their brand at gyms, sporting facilities evolving consumers with the brand. Emotional involvement also goes hand in hand with this product, with consumers when they partake in sporting activities and events they will be reminded of consuming WorkOUT water.

Emotional terminology: Mood: Mood influences consumer behaviour greatly consumers in a good mood make decisions faster, but the other way around is also beneficial with a study in the UK stating that consumers that are depressed will pay up to 300 % more for a product when in this state. Mood congruent judgement is also vital for WorkOUT water because consumers once they pick up a bottle of water of this brand will weigh out the benefits of the product, with the brand as well as the current mood their in.

Measuring emotion: PANAS Positive effect, negative affect scale is sued to capture relative positive and negative emotional experience at a given time. This method seems very beneficial to Work out water to determine what experience a person has before and after they consume the product. This can be used to conduct short forms for consumer to fill out in stores when purchasing WorkOUT water, this will give vital data to marketers on the level of emotions or type of emotions people feel when purchasing WorkOUT water. Emotion, meaning Schema based affect: Semitic wiring: Many different concepts are closely related to each other in the case of WorkOUT water emotion also works in conjunction with this product. So if Work out water appeals its marketing to more emotional effects on memory of the consumer it will have more sales. Emotional intelligence is also important to add into the message and to be considered because it has great effect on altering the mood and train of thought of a consumer. Emotional contagion: Plays a huge role for consumers planning to purchase WorkOUT water, because the people around the consumer will have a great deal of influence on the buying behaviour of the consumer. For example if the lady in store is rude, has tattoos, swear, is angry the consumer will feel intimidated and annoyed. While on the other hand if everyone in store is friendly, smells nice, dresses professionally the consumer will be motivated to buy more products.

6. Personality lifestyle and self concept.

Personality and consumer behaviour: