CONSUMER BEHAVIOUR

Category: Food
Product: Oreo

No. 1 (Chapter 2)

I bought oreo because I like to eat biscuits. Of all the biscuits I ate, this was the
most delicious. Oreo is food for everyone, it is suitable for children, ranging from
toddlers to parents. Oreo has 4 flavors which are original, strawberry, chocolate, and
ice cream. I have often tried all four flavors. The flavor I like the most is the original
taste. I bought oreo 3 days ago at the supermarket as much as 5 packs.
Oreo is the trade name of a type of biscuits which was first produced in 1912 by
Kraft Food Inc which is one of the global companies engaged in food and beverage
production based in Northfield Illinois, United States. Kraft Foods Inc was founded
by James L. Kraft in 1903. The company's motto is "Make today a pleasure". Kraft
Foods Inc has more than 50 brands with a minimum income of $ 100 million, and
eight brands are the biggest contributors to revenue, namely:
1. Kraft cheese
2. Oscar Mayer meat
3. Philadelphia cheese
4. Maxwell coffee house
5. Nabisco cake with the Oreo brand
6. Jacob's coffee
7. Milka chocolate
8. LU biscuits
Kraft Food Inc. is a global company that has branches in various countries
around the world such as Australia, Indonesia, Italy, Germany, Mexico, the Middle
East, Hong Kong, Malaysia, and so forth. With the main markets of Australia,
Canada, Denmark, Germany, Italy, Mexico, Indonesia, the Philippines, Spain, New
Zealand, Venezuela, and others.
 Oreo was initially introduced by the Nabisco company in February 1912 with
the main target market in England. Initially, the Oreo biscuits were shaped like a
mountain consisting of two flavors, namely lemon and cream. The new design was
introduced in 1916. This biscuit consists of two layers of blackish-brown with cream
in the middle. Since its launch in Indonesia in 1996, these biscuits have received a
tremendous response, especially in children who are the main segment of this
product. In 2000 the Nabisco company was acquired by Kraft Food Inc.

Picture 1: Company Logo Picture 2: Oreo Packaging

In marketing management, three main strategies can be carried out by

companies in dealing with market problems. For example in the business world, it is
often found that competing companies create similar products and even match the
physical form of products that have been produced by a company. The three
strategies are segmentation, targeting, and positioning.

Market segmentation, targeting, and positioning are the foundation of turning

consumers into customers. Market segmentation is the process of dividing a market
into subsets of consumers with common needs or characteristics. Each subset
represents a consumer group with shared needs that are different from those shared
by other groups. Targeting consists of selecting the segments that the company
views as prospective customers and pursuing them. Positioning is the process by
which a company creates a distinct image and identity for its products, services, and
brands in consumers’ minds. The image differentiates the company’s offering from
the competition by communicating to the target audience that the product, service,
or brand fulfills their needs better than alternatives.
 In marketing, Oreo applies the STP analysis which is explained as follows:

a. Segmentation

Oreo products use packaging differentiation strategy as a method of applying

market segmentation. Oreo issued a product with a packaging labeled Rp. 1000,00 So
that the distribution of oreo products can penetrate small stalls, not only in stores or
supermarkets. Thus, oreo products can be distributed to various market segments
for both middle and lower-middle-class markets.

b. Targetting

Oreo products choose the target market of consumers with happy family
background. This is done so that everyone from various economic levels can enjoy
good and quality products. With such a target market, Oreo products are expected to
be the choice of all those who want to enjoy quality biscuit products at very
affordable prices.

c. Positioning

Kraft Food Inc. as the owner of the Oreo brand market conducts the following
positioning strategies:

1. Oreo communicates to the public that the products it manufactures are based on
very strict quality standards, are processed with selected materials so that Oreo
is a quality, hygienic and healthy biscuit product.
2. Oreo always maintains that marketing communications remain consistent by
regularly displaying advertisements in the mass media.
3. Oreo continues to maintain its product personality as a healthy and pleasant
biscuit product.
No. 2 (Chapter 3)

Maslow in his research stated that someone has needs that can be divided into
five levels that will be a motivation for that person. The levels are as follows:

1. Physiological Needs: Physiological needs such as eating, drinking, shelter, etc.

It is a need that is considered a starting point for human needs which is often
also referred to as physical demands. Physiological needs are the most
important of all needs.
2. Safety Needs: When the physiological needs are satisfied, then an area of needs
will arise which is broadly expressed as the need for security.
3. Social Needs: The third level of Maslow’s hierarchy consists of social needs,
such as love, affection, belonging, and acceptance.
4. Egoistic Needs: When social needs are more or less satisfied, the fourth level of
Maslow’s hierarchy becomes operative. This level includes egoistic needs.
5. Need For Self Actualization: According to Maslow, once people sufficiently
satisfy their ego needs, they move to the fifth level. The self-actualization need
refers to an individual’s desire to fulfill his or her potential to become
everything that he or she is capable of becoming.

Oreo is a food product. Therefore, if based on Maslow’s Hierarchy of Needs,

this product is included in the level of physiological needs.

Oreo
 Motivation drives consumers to take action by producing psychological
tension caused by unfulfilled needs. Individuals strive to reduce this tension through
selecting goals and subsequent behavior that they anticipate will fulfill their needs
and thus relieve them of the tension they feel. Related to Oreo products, several
things motivate consumers to buy this product in addition to fulfilling psychological
needs, one of which is oreo advertising is very attractive and successfully provides
persuasion to the public to get to know this product more. Kraft Food Inc. uses
young and cute artists who already have credibility in the ad.

Brand personification occurs when consumers attribute human traits or

characteristics to a brand. A “brand personality” provides an emotional identity for
a brand, which produces sentiments and feelings toward the brand among
consumers. A distinct brand personality differentiates the brand from similar
offerings and creates favorable attitudes toward the brand, higher purchase
intentions, and brand loyalty. Regarding Oreo products, we can see that the product
packaging is dominated by blue. This color shows a calm personality.

Self-image or perception of self is very closely related to personality, where

people tend to buy products and services and become customers of retail companies
that have an image or personality that matches their image. Products and brands
have symbolic value for individuals who judge them based on consistency
(compatibility) with their image. In general, people believe that consumers try to
maintain or improve their self-image by choosing products or brands that have an
image or personality that they believe is by their self-image and avoiding products
that are not appropriate. Related to Oreo products, consumers choose to buy this
product because the image of this product is by the consumer's self-image
No. 3 (Chapter 4)

A company including Kraft Food Inc. as the owner of the Oreo brand should
pay attention to how consumers perceive the products that are released because by
knowing this perception, the company can determine the steps that can be taken to
strengthen the customer's perception of the brand. Consumers will show their
behavior after making a perception of what decisions will be taken in buying a
product. With consumer perception, we can find out what are the strengths,
weaknesses, opportunities or threats for our products. In studying perception there
are two important things, namely:
1. The absolute threshold: the lowest level at which a person can feel the
sensation or minimum value of a stimulus to be accepted on a basis. An example
of its application in an Oreo product is if consumers are getting used to when an
oreo ad is shown continuously and there is no change in the price discount rate
then they no longer pay attention to the ad.
2. The different threshold or just noticeable different: the minimum difference
that can be detected between two stimuli that appear simultaneously. An
example of its application in an Oreo product is if a marketer raises the price of
an Oreo pack of Rp. 16,000 to Rp. 18,000, most consumers will notice.

Consumer imagery refers to consumers’ perceptions of all the components of

products, services, and brands, and to how consumers evaluate the quality of
marketers’ offerings. Products and brands have images and symbolic values for
consumers based on the unique benefits that these products claim they provide.
Consumer image of Oreo products is related to products, brands, services, prices,
product quality, retail stores, and manufacturers of these products.
Perceived price is the customer’s view of the value that he or she receives from
the purchase. For example, consumers generally perceive a low price for a meal at a
fast-food outlet, as well as a high price for a meal at a gourmet restaurant, as
consistent with the value that they receive in both instances and therefore as fair.
However, many reasonable consumers may argue that paying about $500 per person
for a meal (there are several restaurants in New York City that charge these prices,
and the meals do not include wine or alcohol) is unreasonable, because they cannot
see how any meal can be equivalent to the value of $500. Another example is Oreo
products. Kraft Food puts an Oreo price Rp. 1,000/pcs and Rp. 16,000/pack. This
price is by the value received by Oreo consumers.
Consumer imagery is related to perceived quality and extends beyond
perceived price and store image. Manufacturers who enjoy a favorable image
generally find that their new products are accepted more readily than those of
manufacturers who have a less favorable or even a "neutral" image. Oreo products
have a pretty good image in the eyes of consumers so this benefits Kraft Food Inc. as
a producer. It also can not be separated from the quality of Oreo products.
Consumers must constantly make decisions regarding what products or
services to buy and where to buy them. Perceived risk is the uncertainty that
consumers face when they cannot foresee the consequences of their purchase
decisions. This definition highlights two relevant dimensions of perceived risk:
uncertainty and consequences. Similarly, when consumers want to buy Oreo
products, consumers first, of course, pay attention to risk. The concept of perceived
risk has major implications for the introduction of new products. Because high-risk
perceivers are less likely than low-risk perceivers to purchase new or innovative
products, it is important for marketers to provide such consumers with persuasive
risk-reduction strategies, such as a well-known brand name (sometimes through
licensing), distribution through reputable retail outlets, informative advertising,
publicity, impartial test results, free samples, and money-back guarantees. Also,
consumers can reduce perceived risk by using online resources that enable them to
generate side-by-side comparisons depicting detailed charts of features, prices, and
ratings of all available models within a given product category.
No. 4 (Chapter 5)

Consumer learning is a process that evolves and changes as consumers acquire

knowledge from experience, observation, and interactions with others and newly
acquired knowledge influx future behavior. It ranges from simple and often reflexive
responses to marketing stimuli (such as packaging, product colors, and promotional
messages), to learning abstract concepts and making decisions about purchasing
complex and expensive products. Elements of learning consist of motives, cues,
responses, and reinforcement. The learning element that influenced me to try or buy
Oreo products was cued. This is because Oreo products have attractive product
displays and advertisements.
Behavioral learning is sometimes referred to as stimulus-response learning
because it is based on the premise that observable responses to specific external
stimuli signal that learning has taken place. Behavioral learning is not concerned
with the process of learning, but rather with the inputs and outcomes of learning;
that is, in the stimuli that consumers select from the environment and the observable
behaviors that result. Three forms of behavioral learning with great relevance to
marketing are classical conditioning, instrumental (or operant) conditioning, and
observational (or modeling) learning. Classical conditioning is viewed as an
automatic response that builds up through repeated exposure and reinforcement.
For instance, if Oreo consumers praise the comfort of these biscuits, then it is likely
that other consumers will also be interested in buying this product.
In advertising any product including Oreo, repetition is the key to forming
associations between brands and fulfillment of needs. Repetition increases the
strength of the association between two stimuli and slows down forgetting this
connection. However, the amount of repetition that aids retention is limited.
Although repetition beyond what is necessary for the initial learning aids retention,
at some point an individual becomes satiated with numerous exposures, and both
attention and retention decline.
Stimulus generalization explains why some imitative me-too products succeed
in the marketplace: Consumers confuse them with the original product they have
seen advertised. Oreo is an imitation product from Hydrox. Hydrox products are
not selling well in the market because their name is more similar to the detergent
brand and the taste is still under Oreo.
Product line extensions are additions of related items to an established brand;
these are likely to be adopted because they come under a known and trusted brand
name. Offering the same product in a different form but under the same brand is a
product form extension. Another strategy stemming from stimulus generalization is
family branding, which consists of marketing different products under the same
brand name.
Licensing is contractually allowing a well-known brand name to be affixed to
the products of another manufacturer. Oreo biscuits for the Asian market are
produced in Indonesia and China. Whereas Oreo biscuits for the European market
are produced in Spain. The main raw material for Oreo production is milk, where
Oreo production in Indonesia is mostly supplied from domestic raw materials.
Although 10% of Oreo's raw materials (milk) are obtained from abroad or imported,
it is still under the Nabisco license.
Instrumental conditioning (or operant conditioning) is based on the notion that
learning occurs through a trial-and-error process, with habits formed as a result of
rewards received for certain responses or behaviors.
Consumer involvement is the degree of personal relevance that the product or
purchase holds for the consumer. High-involvement purchases are very important to
the consumer (e.g., in terms of perceived risk) and thus provoke extensive problem
solving and information processing. The right brain’s passive processing of
information is consistent with classical conditioning. Accordingly, during passive
learning and exposure to low involvement media, continuous repetition of
advertisements is the key factor in producing purchase behavior. Related to Oreo
products, Kraft Food Inc is intense in advertising this product.
For marketers, the goals of consumer learning are increased market share and
brand-loyal consumers. Brand loyalty is a measure of how often consumers buy a
given brand; whether or not they switch brands and, if they do, how often; and the
extent of their commitment to buying the brand regularly. Related to brand loyalty,
inertia brand loyalty is my type of loyalty, including buying Oreo products.

No. 5 (Chapter 6)

Attitude is a learned predisposition to behave in a consistently favorable or

unfavorable way toward a given object. In the context of consumer behavior, an
“object” can be a product, brand, service, price, package, advertisement, promotional
medium, or the retailer selling the product, among many other aspects of
consumption. As consumers, all of us have many attitudes toward products,
services, advertisements, the Internet, and retail stores, among many others.
Whenever we are asked whether we like or dislike a product (for example Oreo
product). I am the type of consumer who shows attitude towards a product.

Personal experience, family and friends, media, the Internet, and (increasingly)
social media strongly affect attitudes. A primary source of attitudes toward products
is the consumers' direct experiences in trying and evaluating them. Personality traits
significantly influence the formation of attitudes. Attitudes toward new products are
particularly influenced by personality characteristics related to one’s innovativeness

In changing the negative attitude to a positive attitude, companies using a

strategy to change the brand image consists of efforts to change the overall
assessment of consumers of the brand. Marketers use this approach by using an
inclusive promotion statement designed to distinguish their brands from the
competition.

The elaboration likelihood model (ELM) proposes that attitudes can sometimes
be changed by either one of two different routes to persuasion a central route or a
peripheral route and that the cognitive elaboration related to the processing of
information received via each route is different. To apply ELM in altering attitudes, I
use a functional approach, which classifies attitudes into four functions: utilitarian
functions, defensive egos, expressive values, and knowledge.