CONSUMER BEHAVIOUR

ASSIGNMENT
2

MELANIE CORNESCHI
MKT20025 | 102092290

28 MAY 2020
Executive Summary

The objective of this report is to propose an analysis on two stages of Consumer Decision Making
Process (CDMP) and the influence of internal and external factors that a consumer typically goes
through. This report comprises of several theories such as Attitudes, Consumer Learning and
Reference Group.

Through the process of a segmentation table, profiling and perceptual map and positioning, we were
able to select a target market and create a persona.

Finally, the conclusion of the report shoes our findings in research and suggested recommendations
for the company to establish towards an overall positive outcome in brand positioning, promotion,
and customer satisfaction.

These recommendations include:

• A New Face Branding to The Company.

• Increase Social Media Presence.
• Customization and Personalisation.

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Contents
Executive Summary ........................................................................................................................... 2
Section 1 – Introduction .................................................................................................................... 4
1.1 Industry Background ................................................................................................................ 4
1.2 Segmentation Table and Profiling ............................................................................................ 4
1.2 Perceptual Map and Positioning............................................................................................... 5
1.3 Target Market .......................................................................................................................... 5
1.4 Persona ................................................................................................................................... 6
Section 2 – Consumer, Internal and External Theories ....................................................................... 7
2.1 Information Search: Stage 2 of Consumer Decision Making Process ......................................... 7
Learning Theory ......................................................................................................................... 7
Reference Groups ...................................................................................................................... 7
Attitude Theory ......................................................................................................................... 8
2.2 Evaluations of Alternatives: Stage 3 of Consumer Decision Making Process.............................. 9
Learning Theory ......................................................................................................................... 9
Reference Groups ...................................................................................................................... 9
Attitudes.................................................................................................................................. 10
Section 3 – Recommendations......................................................................................................... 11
3.1 Introduce A New Face Branding to The Company. .................................................................. 11
3.2 Increase Social Media Presence ............................................................................................. 12
3.3 Introduce Customization and Personalisation ........................................................................ 14
Section 4 – Conclusion ..................................................................................................................... 15
Reference List.................................................................................................................................. 16

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Section 1 – Introduction

1.1 Industry Background

Founded in 2014, AllBirds is a Nez Zealand-American environmentally friendly footwear retailer and
sources all their designs from sustainable materials. New Zealand Native and Founder of AllBirds Tim
Brown struck interest in merino wool and noticed scarcity in the footwear industry. Through this he
teamed up with Co-founder Joey Zwillinger to craft this innovative wool fabric made specifically for
comfort and is completely eco-friendly. (All Birds, 2020)

In this report, we will be primarily focusing on segmenting our target marketing along with a
persona. We will be discussing the stages of Consumer Decision Making Process (CDMP) which
include Problem Recognition, Information Search, Alternatives Evaluation, Purchase Decision and
Post-Purchase Decision Evaluation. (Stankevich A, 2017) We will narrow down two stages and
analyse how the Internal theories of Learning, Memory, Attitude Formation with the External theory
of Socialisation and Reference Groups and how all these theories influence our potential target
consumers.

1.2 Segmentation Table and Profiling

To analyse and develop marketing strategies, we must use segmentation in four different categories.
This will help classify what a consumer wants through needs, wants, and demands. Ideally, All Birds
must create their product for the respect target market. The Segmentation categories include,

Segment Lifestyle Benefit Sought Activities Attitude and Knowledge

Age towards footwear
5 - 12 Highly Active Early Seeking Durability School, playground Low
Educators activities, sports
13 - 19 Highly Social Seeking Style and Trends School, Social Medium
Students and events and
Athletic activities, sports
20 - 32 Active at work and Seeking practical and Work, University, High
social activities, versatility Community
More Adventurous Involvement
Activities Activities, Travel
32 - 50 Active at work, Seeking Quality Work, Casual Medium
officegoers Exercise
50 + Spending majority Seeking Comfort and Casual walks, Low
of their time at Security watching television
home, focusing on and reading,
wellness and
personal care.

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Demographics, Psychographics, Behavioural and Geographic. (Bhasin H, 2020) In this segmentation
table we will be focusing on Demographic and Psychographic.

1.2 Perceptual Map and Positioning

All Birds is positioned as a footwear retailer who prioritises comfort and practicality over fashion
trends. It is mid-range in price compared to its competitors.

1.3 Target Market

Through the prepared segmentation table and perceptual map, Allbirds should choose the set to
tailor their marketing and sales efforts to specially reach young adults between the ages of 20-32
who seek a practical and versatile benefit for footwear and have an active and social lifestyle. This
target market may already suit the current market that Allbirds are trying to reach with their
comfortable footwear as they have positioned themselves as an innovative and diverse brand with
positive impacts to the environment.

As Allbirds is an online retailer, it is best to cater towards this target market as they rely heavily on
technology and the internet. This can be for either researching, browsing, socialising, and shopping.

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1.4 Persona

Through segmentation, profiling and selecting a target market, we were able to put together the
persona who Allbirds should ultimately aim for. Adele Revella, founder of Buyer Persona Institute,
describes it like this, ‘Actionable buyer personas reveal insights about your buyers’ decisions—the
specific attitudes, concerns and criteria that drive prospective customers to choose you, your
competitor or the status quo.’ (User Testing, 2019) Characteristics like sociable, modest, and
ambitious best suit the characteristics of the target market. Personality traits like extrovert,
energetic and adventurers also fit into this category too.

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Section 2 – Consumer, Internal and External Theories

2.1 Information Search: Stage 2 of Consumer Decision Making Process

In this section of the report we will be focusing on 2 stages of Consumer Decision Making Process
(CDMP), Stage 2 Information Search and Stage 3 Evaluation of Alternatives.

Information Search, which is the second stage of CDMP, depends on the buyer’s decision-making
process about products and acquiring the correct information to satisfy their needs. Information can
be obtained in different ways such as commercial, personal, public, and experiential sources. (Zalani
C, 2018) Consumers will also perceive risks when searching for information. This can be functional,
physical, financial, social, psychological and time risk.

Learning Theory

There are several ways our target market consumers will search for information on a brand or
product, but the main way is via the internet. Over a third of young adults watch online advertising
or marketing clips, with a similar proportion watching clips demonstrating or reviewing products as
branded and product-related content was clicked-on, viewed, sought out, uploaded and commented
on at regular intervals, and emerges as a key element in young adult lives, both on and offline.
(Kingdon A & Ocenco B, n.d)

The Cognitive Learning Theory “holds that learning involves complex mental processing of
information.” (Carlson J, et al. 2014) A consumer relies on collected information on price,
performance and other material on various competitors that has been retained from their memory
from sources. Consumers will use this type of learning when researching and seeing if an
advertisement they view online suits what they have learnt before with that product type. Currently
Allbirds is using cognitive learning theory by emphasizing the benefits of the product to their target
market. This includes emphasising the use of sustainable materials and comfortability.

Reference Groups

When conducting an information research, our target market will also refer to reference groups to
begin their research. 76 percent of Young Adult identify family as the most important thing in their
lives (Kingdon A & Ocenco B, n.d) so therefore their opinion and advices on products will influence
their decision making.

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Reference groups also have a high impact of this stage as endorsement of a product, either through
use or statements about the product or brand, can have those who look to the group purchase that
product. These groups can either be formal or informal and communicated through opinion leaders
who influence what others do, act, and buy. Our target market will most likely be influenced by
family and friends as they share interests with them and trust in their opinions. They will also be
inclined to rely on celebrity endorsements.

A recent Study by University of Arkansas in collaboration with the Manchester Business School in
London found that consumers (ages 18-24) are most susceptible to celebrity brand endorsements
than other ages groups. (Zoovu 2016)

Attitude Theory

Based on the previous paragraph, celebrity brand endorsements can be viewed as Attitude
Modelling, as these developed attitudes are generated by watching others that consumers trust and
respect. (Dean G, 2010)

A consumer’s belief about the attributes of a brand can also be changed and learnt when providing
influencing information. This is the type of marketing Allbirds must provide as a diminutive brand
compared to its prevalent competitors, Nike, and Sketches. To contest the standards of these
competitors, Allbirds can benefit from celebrities, well-known sustainability figures or environmental
activists. This can mean that consumers who are not yet part of a group that values sustainability,
can still join and associate in one. This is the type of embedment that Allbirds can do for their target
consumers.

At this stage through the given theories Allbirds should establish their credibility in the industry and
through the recommendations that will be mentioned in section 3, Allbirds can be successful in this
stage.

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2.2 Evaluations of Alternatives: Stage 3 of Consumer Decision Making Process

Stage 3 which is Evaluation of Alternatives is taken into two different problem-solving methods. This
can either be limited or extensive. If a consumer takes on limited problem solving, they have already
established the basic criteria of your brand and competitors but will continue to differentiate the
differences. They could also take a more extensive problem-solving method where they need large
amounts of information for products that are more expensive, complicated and have long time
commitments. (Zalani C, 2018)

Learning Theory

A substantial 47 percent minority of Australian respondents reported actively buying brands that
have a reputation for behaving responsibly and sustainably. With a solid 39 percent of Australians
actively recommend responsible brands: 30 percent somewhat and 9 percent strongly. This is
important when consumers are looking at alternatives as Allbirds take pride in their sustainable
fabrics and push to sell this idea to their target market. (Havas Pr 2014) The Cognitive Learning
involved in current Allbirds marketing is emphasising the use of sustainable materials and
comfortability. Data from a report by ecological certification company Oeko-Tex illustrated that
while that ‘69% of Millennials say they look into claims of sustainability and eco-friendliness when
researching clothing purchases.’ (Moore K 2019)

Competitive brands and alternative do not offer the same sustainable advantages that Allbirds does,
therefore, when considering the alternatives, Millennials will most likely and choose the brand that’s
more eco-friendly and can have a higher chance of benefiting the environment. Consumers are
becoming more aware of the consequences of fast and cheap fashion and how it can impact their
future, by pushing this declaration, companies like Allbirds can benefit from their viable brand.

Reference Groups

The Social factors like reference groups may influence decisioning making in this stage as all
consumers are part of a group. The reference group will provide comparisons to consumers about
their behaviour, lifestyle, and habits.

For example, if a consumer in our target market had a co-worker who owned a pair of Allbirds
runners, their vouch for them can influence anyone who they work with as they share the same
lifestyle of working in the same industry and benefits can be shared. Otherwise, that information is
learnt and can be used for the future when the consumer is in search for some new shoes for work.

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Attitudes

Attitudes can also have an impact during this stage of CDMP as a brand is able to appeal to
consumers through their marketing appeals and messages. Also known as the Value Expressive
function, if our target market values sustainability, this will be reflected in their purchase behaviour.

Through the theories in this stage, Allbirds should consider all the needs of their target market and
create subsequent strategies aiming to correspond to their product’s strengths.

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Section 3 – Recommendations

3.1 Introduce A New Face Branding to The Company.

Building a connection is very important when getting your brand out to the target market. This
comes back to reference groups as consumers will rely heavily on either their intimate family and
friends or even a social leader or celebrity.

Allbirds would benefit in creating a partnership with several iconic leaders and influences in
sustainability, environmentalists or even sports.

Take example of leading brand Nike, who uses social media to create a sense of community and
lifestyle. They use famous athletes and shined upon icons to advertise and sponsor their brand to
create a social figure reference group to consumer who look up to them.

In these images above, Nike uses celebrities in a cinematic shot with a short aspiring slogan and their
branding. Using Iconic basketball player Lebron James influences fans and those who aspire to be
like him to follow the brand that he associates with. Putting the slogan ‘Where Legends Are Made’
will influence the audience to believe that they can also achieve what Lebron James has and be put
in the same group. Likewise, Us Women’s Soccer team captain Alex Morgan invites the audience in
with her ‘Dream with Us’ promotional advertisement to make the reader feel as though they are
invited to the community.

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3.2 Increase Social Media Presence

Selling products and services is not enough for a company is the footwear industry. Allbirds must
create a social media presence. Currently, Allbirds social media presence is low and can be improved
with advertising and creating social media accounts. ‘

80% of consumers use social media to engage with brands with 31% use it to browse for things to
purchase. (FitzGerald R, 2019) This is important when considering the second stage of CDMP as the
target market will look for information through social media and the internet.

Millennials are the generation that spends majority of their time online with 47% of their purchases
being influenced by social media. (FitzGerald R, 2019)

We can take example of Adidas who have a solid social media strategy. By using popular platforms
like Facebook, Twitter and Instagram, Adidas can reach many audiences and can cater for their
specific target market easily. As most millennials are using social media daily, Allbirds can take the
advantage to advertise their branding through active digital marketing on social media.

From the image above, we can analyse how much Adidas’ performance continues to grow on all
social media platforms. The main advantage of social media presence is growing your brand image
and credibility to existing and future followers making it easier likely for conversions more likely to
happen. When reaching a wider audience, there is a large chance of reaching the intended target
market and shoppers who will be able to recommend them to other buyers.

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I created some mock-ups on advertisements Allbirds can adopt on social media platforms. They are
simplistic with short and eye-catching slogans like the type of advertisements Nike and Adidas
embrace. By advertising that Allbirds is a sustainable and revolutionary brand, consumers are more
inclined to research about their products and click on what the brand as to offer. The sleek design
resembles the look of other competing brands such as Sketches, Adidas, and Hush Puppies but by
using their key characteristics of being eco-friendly, consumers are more inclined to choose their
brand over the others (during stage 3 of CDMP).

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3.3 Introduce Customization and Personalisation

Another technique that can draw in our target audience is making the product more unique and
personalised in terms of design. Millennials tend to look for more practical and innovative styles and
if they were able to design their own shoe, they will be more likely to find the best suited design
within the brand.

Just like Nike has adopted here, they have very basic colour shoes, but customers are able to
customise the shoe to their liking, adding diversity and creativity. This is a new feature introduce and
not many competitors have adopted it yet so this may be the best way Allbirds can slide their way to
the top of the footwear industry. According to Brand Channel, NikeiD has seen its online business
triple since 2004. (Margalit L, 2014)

A survey of more than 1,000 online shoppers conducted by Bain & Co. found that more than a
quarter of shoppers, 25-30 percent, are interested in online customization options. (Margalit L,
2014) With the trend of customisation growing, Millennials will feel more inclined to the personal
and exclusive feeling it can give, along with the benefits of it being eco-friendly and comfortable to
wear.

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If these recommendations are put into practise, we hope to see Allbirds move across their current
position and along with their popular competitors Nike and Adidas.

Section 4 – Conclusion

Through Segmentation, Profiling and Positioning, our team has delivered a list of recommendations
that fits with the selected Target Market of Young Adults between the ages of 20-32 who seek a
practical and versatile benefit for footwear and have an active and social lifestyle.

Drawn and analysed from two stages of Consumer Decision Making Process of Information Search
and Product Evaluation, we identified two internal theories and an external theory on how these
factors are likely to influence our select target market.

From then, we were able to make fitting recommendations towards successful outcomes of
promotions, consumer satisfaction and overall branding growth. If these recommendations were to
be implemented, there will no doubt be a growth in consumers who choose the brand Allbirds.

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Reference List
All Birds 2020, Our Story, All Birds, viewed 12 May 2020
< https://www.allbirds.com.au/pages/our-story >

Barkovska, L, Koseska, E 2012, The Impact of Cognitive Learning on Consumer Behaviour, Procedia - Social and
Behavioral Sciences, Volume 44, pp. 70 – 77.

Bhasin, H 2020, 4 types of Market segmentation and how to segment with them?, Marketing 91, viewed 12
May 2020
< https://www.marketing91.com/4-types-market-segmentation-segment/ >

Carlson, J, O’Cass, A, Paladino, A, Scgiffman, L 2014, Consumer Behaviour, Pearson, Volume 6, pp. 213.

Dean, G 2010, Understanding Consumer Attitudes, Marketography, viewed 12 May 2020

< https://marketography.com/tag/value-expressive-function/ >

FitzGerald, R 2019, The Impact of Social Media to Consumer Buying Behaviour, Connext Digital, viewed 12 May
2020
< https://connextdigital.com/how-social-media-impact-consumer-buying-behavior/ >

Havas Pr 2014, The Conscientious Behaviour of Consumers in Australia, BeCause IT MATTERS Australia, pp. 1 –
16.

Kingdon, A, Uyenco, B n.d., Young Adults Revealed: The lives and motivations of 21st century youth, Microsoft
Advertising and Synovate

Margalit, L 2014, The Psychology Of Online Customization, Tech Crunch, viewed 21 May 2020
< https://techcrunch.com/2014/11/11/the-rise-of-online-customization/ >

Moore, K 2019, Report Shows Customers Want Responsible Fashion, But Don’t Want To Pay For It. What
Should Brands Do?, Forbes, viewed 14 May 2020
< https://www.forbes.com/sites/kaleighmoore/2019/06/05/report-shows-customers-want-responsible-
fashion-but-dont-want-to-pay-for-it/#73549c5e1782 >

Stankevich, A 2017, Explaining the Consumer Decision-Making Process: Critical Literature Review, Journal of
International Business Research and Marketing, Volume 2, Issue 6, pp. 7 - 14.

User Testing 2019, The 5 Best Guides For Creating A Customer Persona, User Testing, viewed 12 May 2020
< https://www.usertesting.com/blog/customer-personas >

Zalani, C 2018, Consumer Decision-Making Process Mastery, Ecomacademy, viewed 12 May 2020
< https://ecomacademy.com/consumer-decision-making-process/ >

Zoovu 2016, Impact of Celebrity Endorsement on Consumer Buying Behavior, Zoovu, , viewed 16 May 2020
< https://zoovu.com/blog/impact-of-celebrity-endorsement-on-consumer-buying-behavior/ >

Images

Unmetric, N.A, A deep dive into the social media habits and performance of Adidas, viewed 16 May 2020
< https://unmetric.com/brands/adidas >

McFadden, M 2020, Allbirds Tree Runners Review (2020) | My Favorite Travel Sneakers, viewed 16 May 2020
< https://theatlasheart.com/allbirds-tree-runners-review/ >

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