CONSUMER BEHAVIOUR REPORT
Majan’s ‘Deli Style Crispy Nuts’
Tutor: Sangeeta Rai
Lily Sumner (n9486852)
Page 1 of 10 I. Context and Opportunity Recognition
Majan’s is a family-owned business that produces a range of high quality, healthy and delicious snack foods. With the rise of importance in fitness, health and wellbeing within Australian consumers, the innovation of their healthy snack range has become increasingly popular. This popularity was evident when Majan’s Bhuja Range won Australia’s most popular nut snack in 2014 (Majans, 2017). In 2017, Majan’s have decided to extend their product range with the launch of their new snack “Deli Style Crispy Nuts”. If Majan’s want this new snack to be successful they must increase first-time trial and maintain brand loyalty. However, in order for these goals to be achieved, Majan’s overall goal should be to increase and build brand awareness of males and females aged 25-50 years old. Therefore, this report will focus on the success of new and existing snack foods in Australian Supermarkets and how Majan’s can build awareness for their new product.
II. Literature Review
Snack foods are typically defined as the consumption of food between the traditional three meals a day (Chaplin & Smith, 2011 & Forbes, 2015). From chips and biscuits, to dried fruit and nuts there are endless types of snacks available in grocery stores. Majan’s latest innovation, ‘Deli Style Crispy Nuts’ are a delicious, sophisticated and gourmet take on traditional peanuts. Dipped in a crispy batter and made with gourmet flavours including Orange Zest & Roasted Cumin and Chipotle Mayonnaise, these nuts are the perfect
accompaniment to a cheese platter, beer, wine or even just as a snack on their own. As the flavours of these nuts are gourmet and sophisticated, the target audience would be males and females aged 25-50 years old.
With the rise in science and technology, we could assume that developing a successful and innovative new product would be easy. However, despite the advance in marketing research and technology, the rate of product success has not increased (Crawford, 1977). In the past two years alone, only 48 of 10,700 innovation launches in Australian supermarkets have been ‘breakthrough innovations’ (Nielsen, 2016). This research shows that success within the Australian grocery is uncertain; therefore, brands must create products that are
innovative, relevant, valuable and advantageous.
After a brand builds a reputable image through a successful product, brand extensions is a popular branding strategy to introduce new products to their range (Sattler, et.al. 2010). Brands decide to extend their existing range by introducing new products to the marketplace for a number of reasons. Some of these reasons include; increase in sales, reviving old products, new concepts and targeting a different audience (Hanchate, 2006 & Doan & Chambers, 2012). To determine whether a new product will be successful within the
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marketplace, there are multiple factors that marketing directors must take in to consideration. Some of these factors include; taste, packaging design, timing of launch, product placement, price, competitors and adaptability to market changes (Ottensen & Gronhaug, 2005 & Doan & Chambers, 2012).
Firstly, taste has been suggested to be the most important factor evaluated by consumers when making snack food purchase decisions (Babicz et.al., 1994). Secondly, packaging design plays an important role in achieving effective communication goals between a brand and consumers (Silayoi & Speece, 2007). Visual aesthetics tend to attract the consumer to a product; therefore, it is important to use colours, pictures and symbols that affiliate with their brand. Timing of launch is another important factor to consider depending on whether the snacks flavours are associated with a particular season (Doan & Chambers, 2012). Furthermore, the product’s price and placement are critical determinants of success; therefore, these factors must be consistent and reflect their target audience (Rajagopal, 2008 & Doan & Chambers, 2012).
The factor of particular importance is acknowledging a brands competitors and
understanding their product offerings. Generating brand preference among competitors is the first and most common route to winning customers and increasing sales (Aaker, 2011). However, in the busy and competitive marketplace that is the supermarket, it is inordinately difficult to create innovation that will significantly alter market momentum (Aaker, 2011). Therefore, a brand must either be able to find a point-of-difference and strategically market this or make their offerings less costly than competitors (Morgan, 2009 & Aaker, 2011). Finally, brands must be able to adapt to market changes in order to stay relevant with the constant change of consumers wants and needs. Health is a factor that has become increasingly important to consumers, particularly when it comes to choosing snack foods (Forbes, 2015). Health gurus are continually responding to this interest by employing, interpreting and promoting products and practices that will advance healthy living (Aaker, 2011). To stay competitive within the snack food marketplace, brands must consider all of these factors for their new or existing products.
III. Theory/Model/Framework
So what exactly drives consumers to purchase snack foods in the first place? This can be answered by understanding the consumer behaviour theory of motivation. Motivation is the process that occurs when a need is aroused and the consumer wishes to satisfy this need (Solomon, et.al, 2013). Needs, drives and goals are the three elements within the motivation process that consumers go through in order to achieve satisfaction.
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As shown in Figure 1, the consumer must first acknowledge a desire. For example: Lily has a need for food or else she will starve and become sick.
Once this desire is acknowledge, a motive to achieve this desire will become apparent. Drive theory focuses on biological needs that produce unpleasant states of arousal (Solomon, et.al, 2013). It measures the demand made upon the mind and the source of this drive is bodily craving (Enckell, 2007).
Lily’s stomach grumbles at 11am. She acknowledges her hunger, but doesn’t want to eat lunch yet as it’s too early.
The motivation for satisfaction will not be achieved until the consumer has reached their desired goal. The consumer must use their motivation to take action.
Lily hunger consumes her so she decides to go to the shops. She buy’s Majan’s Deli Style Crispy Nuts and eats the delicious snack. Her need has been satisfied.
Motivation is goal-oriented and particularly concentrates on the need for satisfaction. Similarly, eating food is a form of goal-directed behaviour that incorporates many
motivational aspects. In the decision-making process for snack foods, consumers consider; situational analysis, product ingredients and strive for variation and healthy choices (de Boer & Schosler, 2016). According to Nielsen (2014) research, Australians put particular
importance on healthy snack choices. When asked about their first choice of snack, one in five chose a healthy option and 63% of Australians made sure that their snacks contained no artificial colours or flavours (Nielsen, 2014). Consequently, it is evident that more than half of Australians are approaching their motivational conflicts towards snack foods in an approach-avoidance way.
The theory of cognitive dissonance is based on the premise that individuals seek consistency in their lives and when inconsistency exists, something must change to
eliminate the dissonance (Solomon, et.al, 2013). One approach that consumers may use to achieve consistency is the approach-avoidance conflict resolution. Approach motivation is behaviour directed towards positive stimuli; whereas avoidance motivation is behaviour directed away from negative stimuli (Elliot, 2006). An approach-avoidance conflict is evident when we desire to fulfil a goal but also wish to avoid it at the same time (Solomon, et.al, 2013 & Elliot, 2006). For example, consumers love eating delicious food; however, also wish to reduce calorie, fat and sugar intake. In the approach-avoid conflict, consumers will opt for delicious snacks that are also considered healthy. This allows them to achieve their goal of eating healthy without sacrificing taste or pleasure. In relation to Majan’s snacks, the majority of consumer’s who will be interested in their products will be consumers who resolve
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motivational conflict in an approach-avoidance way as their products are considered delicious yet healthy.
IV. Recommendations
The first recommendation will focus on price and how Majan’s should position their ‘Deli Style Crispy Nuts’ in relation to competitors. It was earlier identified that the rate of product success and breakthrough innovation was low; therefore, it is important that Majan’s ‘Deli Style Crispy Nuts’ enter the marketplace at an affordable and suitable price. The first step in determining pricing calculations involves looking at the products direct and secondary competitors. Majan’s ‘Deli Style Crispy Nut’s direct competitors include products that offer a very similar or identical product to their own. Looking at the Woolworths (2017) online catalogue, it is evident that Majan’s new product has minimal direct competitors but many secondary competitors. Figure 2 recognizes the direct and secondary competitors’ products and their price offerings. From the table it is clear that Majan’s only direct competitor is Red Rock Deli’s Coated Peanuts.
Majan’s directly state on their packet that they are handmade in Queensland and use Kingaroy peanuts. Consequently, they can use this point-of-difference to make their product more exclusive and expensive than their competitors. Majan’s ‘Deli Style Crispy Nuts’ should price their product at $5 which is one dollar more than their direct competitors (Figure 2). Majan’s target audience is males and females aged 25-50 years old. Therefore, they are able to price their product at $5 as their target audience have a higher disposable income. However, to gain brand awareness when their new product is launched, Majan’s should offer their ‘Deli Style Crispy Nuts’ at a promotional sale price of $3.50. According to Nielsen’s (2014) research, almost half of Australian’s only buy their snacks on sale. Clearly, price and promotion have a strong relationship and are critical to success in the snack food aisles. Therefore, it is important that Majan’s offer their new product at a lower price offering than competitors. This low price will increase brand awareness and motivate Australian
consumers to choose their snack over competitors.
The second recommendation will focus on promotion and how Majan’s should advertise their latest product. For this recommendation, it would be most beneficial for Majan’s to advertise their ‘Deli Style Crispy Nuts’ in the Coles magazine. In 2016, it was found that the Coles magazine was the most popular magazine in Australia with 3.2 million people reading the magazine monthly (Roy Morgan, 2016). Additionally, 70% of readers are females who on average, spend $183 every week at the supermarket (Coles, 2016 & Roy Morgan 2016). Coles research found that readers love reading about new products and what they have to offer (Coles, 2016). Consequently, it was found that products advertised in the magazine
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had a 30% increase in sales making the Coles magazine the most cost-effective magazine in Australia (Coles, 2016).
It is evident that advertising in this magazine could bring Majan’s ‘Deli Style Crispy Nuts’ large exposure and overall brand awareness. The cost of advertising on a full page in the Coles magazine is $34,000 (Coles, 2016). Despite this high cost, the advertisement provides great brand awareness for Majan’s which could potentially lead to many loyal customers. The final recommendation will focus and incorporate two marketing tactics, place and promotion. Determining where to position new products in the grocery store all depends on the product offering and price. Shelving and product placement can be extremely effective in generating brand awareness if a product is positioned correctly (Barton, 2015). The shelving position combined with customer movement patterns can increase product sales by several percentage points (Barton, 2015). Therefore, it is imperative that Majan’s ‘Deli Style Crispy Nuts’ secures a prime shelf location within the snack food aisle.
By positioning ‘Deli Style Crispy Nuts’ at consumer eye-level, Majan’s can increase brand awareness and sales through nudging. Nudging can consciously or sub-consciously
influence consumers to purchase products just by changing the presentation of the shelves (Thaler & Sunstein, 2008 & Wilson, et.al, 2015). The first products that consumers see are the ones at their eye level; therefore, Majan’s should place their ‘Deli Style Crispy Nuts’ in this position to motivate consumers to buy their product. Figure 3 shows where the ‘Deli Style Crispy Nuts’ should be placed on the supermarket shelves.
Furthermore, another place and promotion tactic would be to sell Majan’s ‘Deli Style Crispy Nuts’ at point-of-purchase displays in liquor stores. Point-of-purchase (POP) displays is an effective promotional strategy as it encourages consumers to make impulse purchases (Quelch & Cannon-Bonventre, 1983). POP displays in liquor stores are the perfect place to sell Majan’s ‘Deli Style Crispy Nuts’ as the product is specifically targeted towards males and females aged 25-50 years old. ‘Deli Style Crispy Nuts’ are the perfect accompaniment to alcohol; therefore, selling this product in liquor stores will increase overall brand awareness via impulse purchases.
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Appendix
Figure 1
Retrieved from: http://www.mba-institute.org/MBA_Certified_Leader_Training.php
Figure 2
Product
Price
Direct Competitor
Red Rock Deli Coated Peanuts
Red Pepper and Roasted Garlic (150g) & Sweet Chilli and Basil (150g)
$4 Secondary Competitor Woolworths Salted Peanuts (375g) $2.10 Nobby’s Salted Peanuts (375g) $3.35
Red Rock Deli Chips
Sea Salt and Balsamic Vinegar (165g)
$4.49
Cobs GF Popcorn Sea Salt (80g)
$2.85
Majan’s
Deli Style Crispy Nuts Introductory Price $3.50 Actual Price $5
Page 7 of 10 Figure 3
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