Theme 4.2 Interaction between consumers and producers

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Theme 4.2Interaction between consumers and
producers
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The consumer is king!!!
Functional areas of the business
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Framework Lectures focusing on the consumer and
the interaction between consumers and producers
in the agricultural context

• The various marketing functions and the barriers
  to consumer satisfaction they help to overcome
• The basic forces driving consumer behaviour

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Interaction between consumers and producers in
the agricultural contextThe conflicting needs
of producers and consumers that agricultural
marketing seeks to resolve
Producers try to Consumers try to
Maximise long run profit 2. Sell large quantities of a few products 3. Seek the highest prices Maximise the satisfaction they receive from the products they consume with their limited incomes 2. Buy small quantities of many products 3. Seek the lowest prices
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Interaction between consumers and producers in
the agricultural contextHow should the conflict
be resolved?

• Consumers and producers knowledge of
• Variety of goods available
• Prices of available goods
• (In order to make informed choices)
• Consumers determine agricultural marketing
  success
• Consumers needs
• The role of consumption
• The effect of consumer choices on the marketing
  process

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Marketing functions and barriers to consumer
satisfactionThe exchange functions
1. Buying ownership separation / barrier 2.
Selling ownership separation / barrier
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Marketing functions and barriers to consumer
satisfactionThe physical functions
3. Storage time separation / barrier 4.
Transportation space separation / barrier 5.
Processing value separation / barrier
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Marketing functions and barriers to consumer
satisfactionThe facilitating functions
6. Grades and standards information separation
/ barrier 7. Financing value, time and space
separation / barrier 8. Risk taking time
separation / barrier 9. Market information
information separation / barrier
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Marketing functions and the barriers to consumer
satisfaction

• The barriers to consumer satisfaction
• Ownership Time Information
• Value Space
• The marketing functions
• Exchange functions (buying selling)
• Physical functions (storage, transportation,
  processing)
• Facilitating functions (grades standards,
  financing,
• risk taking, market information)

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The basic forces driving consumer behaviour

• The field of consumer behavior is the study of
• individuals, groups or organizations
• and the processes they use to
• select, secure, use and dispense of products,
  services, experiences or ideas
• to satisfy needs
• and the impacts that these processes have on the
  consumer and society.
• (Source Hawkins, Best, Coney, pp.7)

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The basic forces driving consumer behaviourAn
overall model of consumer behaviour
External Influences Culture Subculture Demographic
s Social status Reference groups Family Marketing
activities
Consumer Decision Process
SITUATIONS Problem recognition Information
search Alternative evaluation Outlet selection
and purchase Post purchase behavior
Experiences and acquisitions
Self-concept And Lifestyle
Needs
Desires
Internal influences Perception Learning Memory Mot
ives Personality Emotions Attitudes
Experiences and acquisitions
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The basic forces driving consumer behaviour
External influences Culture and sub
culture Culture is the complex whole that
includes knowledge, belief, art, law, morals,
customs and any other capabilities and habits
acquired by humans as members of society
(Source Hawkins, Best, Coney) Within every
cultural group there are certain sub cultures
that provide more specific identification and
socialization for its members, more specific
patterns of behavior. (Kotler)
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The basic forces driving consumer behaviour
External influences Demographics Demographics
describe a population in terms of its        
size         distribution (geographic
location)         structure (age, income,
education, occupation) (Source Hawkins, Best,
Coney)
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The basic forces driving consumer behaviour
External influences Social rank / status Your
position relative to others on one or more
dimensions valued by society (Source Hawkins,
Best, Coney)
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The basic forces driving consumer behaviour
External influences Reference groups A
reference group is a group whose presumed
perspectives or values are being used by an
individual as the basis for his / her current
behaviour (Source Hawkins, Best, Coney)
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The basic forces driving consumer behaviour
External influences Family Limited family,
extended family (Source Hawkins, Best, Coney)
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The basic forces driving consumer behaviour
Internal influences Learning Def Learning The
process by which the content or organization of
long-tem memory and behavior are changed as a
result of conscious and non-conscious information
processing Def Information processing A series
of activities by which stimuli are Perceived
(Exposure, Attention) o  Transformed into
information (Interpretation) o  Stored (Short
term memory or long term memory)
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The basic forces driving consumer behaviour
Internal influences Learning With respect to
involvement 2 types of learning       
High-involvement learning        Low-involvement
learning Involvement is a function of the
interaction between        The
individual         The stimulus
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The basic forces driving consumer behaviour
Internal influences Memory Definition Memory
is the total accumulation of prior learning
experiences. Two interrelated components Short
term memory / working memory Long term memory
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The basic forces driving consumer behaviour
Internal influences Personality Definition Pers
onality is an individuals characteristic
response tendencies across similar situations.
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The basic forces driving consumer behaviour
Internal influences Emotions Definition Emotion
s are strong, relatively uncontrolled feelings
that affect our behavior OR pleasant or
unpleasant internal tension, which could be more
or less conscious to the consumer Emotions can
be triggered by        External events       
Internal processes
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The basic forces driving consumer behaviour
Internal influences Motives Definition A
motive is a construct representing an
unobservable inner force that stimulates and
compels a behavioral response and provides
specific direction to that response Maslows
hierarchy of needs Proposes a motive hierarchy
shared by all        Physiological       
Safety        Belongingness       
Esteem         Self-actualization
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The basic forces driving consumer behaviour
Internal influences Attitudes Definition Attitu
de is a willingness or predisposition of the
consumer to react positively or negatively to a
stimulus pattern of a product offer and can also
be seen as the consumers evaluation or image of
a product Three components of
attitudes          Cognitive component         
Affective component          Behavioral
component
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The basic forces driving consumer behaviour
Internal influences Perception Definition The
first three steps of information processing
(exposure, attention, interpretation) constitute
perception. Figure The perception of
products                    
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The basic forces driving consumer behaviour
Self-concept and lifestyle Def
Self-concept Self-concept is the totality of the
individuals thoughts and feelings having
reference to him- or herself as an object. 4
components of self-concept       
Actual        Ideal        Private       
Social Def Lifestyle How we lived, based on
past experiences, innate characteristics, current
situation.
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The basic forces driving consumer behaviour
The consumer decision process 1. Problem
recognition 2. Information search 3.
Alternative evaluation 4. Outlet selection and
purchase 5. Post purchase behavior
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The consumer decision process

• Problem recognition
• It involves the existence of a discrepancy
  between the consumers desired state and the
  actual state.
• If discrepancy between these two states is
  sufficiently large and important, the consumer
  will begin to search for a solution to the
  problem.
• Marketing managers want to influence problem
  recognition rather than react to it.
• Generic Problem recognition
• A discrepancy that a variety of brands can reduce
• Selective problem recognition
• A discrepancy that only one brand can solve

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The consumer decision process

• Information search
• External info. search
• Personal sources - friends and family
• Independent sources consumer groups,
  professionals, government agencies
• Marketing sources sales personnel, advertising
• Experiential sources direct product inspection
• Internal info. search
• Acquired in previous searches and personal
  experiences own memory
• Consumers should engage in external search only
  to the extend that the expected benefits (lower
  prices, more satisfactory purchase) outweigh the
  expected costs

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The consumer decision process

• 3. Alternative evaluation
• Evaluation criteria are the various features or
  benefits a consumer looks for in response to a
  particular problem
• Critical step in utilizing evaluation criteria
• Which evaluation criteria are used by the
  consumer
• How the consumer perceives the various
  alternatives
• The relative importance of each criteria
• Evaluation criteria such as price, size, and
  color can be judged easily and accurately
• Criteria such as quality, durability and health
  are much more difficult to judge

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The consumer decision process

• Outlet selection and purchase
• Three general ways to make these decisions
• Item first, outlet second
• Outlet first, item second
• Simultaneously
• Evaluation Criteria for Outlet
• Image Service, Clientele, Convenience etc.
• Store Brands
• Outlet location Closer preferred
• Larger outlets

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The consumer decision process

• 5. Post purchase behavior
• Postpurchase dissonance
• Following some purchases, consumers experience
  doubts or anxiety about the wisdom of the
  purchase
• Product use/nonuse
• Both marketers an consumers suffer when consumers
  buy products that they do not use or use less
  than intended
• Disposition
• May occur before, during or after use
• Costs and scarcity of raw materials big concern
• Purchase evaluation process
• Consumers develop certain expectations about the
  ability of the product to fulfill instrumental
  and symbolic needs

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Global food trendsA discussion based on the
food trends observed at the SIAL Food Fair 2002
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Global food trendsobserved at the SIAL Food Fair
2002

• Main trend categories
• Pleasure
• Convenience
• Health
• Fitness
• Ethics

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Global food trendsobserved at the SIAL Food Fair
2002

• Pleasure
• Enjoyment Sophistication
• Region Tradition
• Difference Variety
• Discovery Exoticism

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Global food trendsobserved at the SIAL Food Fair
2002

• Convenience
• Nomadism Freedom
• Easiness Time saving

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Global food trendsobserved at the SIAL Food Fair
2002

• Health
• Naturality, organic, safety
• Long life Health / Medical, Functional

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Global food trendsobserved at the SIAL Food Fair
2002

• Fitness
• Well being Appearance
• Nutrition Slimness

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Global food trendsobserved at the SIAL Food Fair
2002

• Ethics
• Ethics Citizenship
• Environment Ecology

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References

• Hawkins, D.I., Best, R.J. Coney, K.A. (1998).
  Consumer behavior Building Marketing Strategy.
  International edition. McGraw Hill Boston.
• (pp.6 and other definitions in various chapters)
• Van Der Walt, A., Strydom, J.W., Marx, S
  Jooste, C.J. (1997). Bemarkingsbestuur. Derde
  uitgawe. Juta Kie, BPK Kenwyn.
• (pp.78-85)
• KOTLER, P. (2000). Marketing management.
  Millenium edition. Upper Saddle River
  Prentice-Hall.
• (Chapter 6)