Case Study “Pet Owners and Their Pets or ... Consumers and Their Owners?”

Case Study “Pet owners and their pets or ... consumers and their owners?”

Written by Tjark Hartmann, Student ID: 20528 19.10.2010

Words: 1649

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Content
Introduction......................................................................................................................................... 3 Insight .................................................................................................................................................. 3 Reasons for owners spending with reference to consumer behaviour theory................................... 3 Reasons of pet ownership ................................................................................................................... 4 Conclusion and impact on Retailers marketing strategy..................................................................... 5 References ........................................................................................................................................... 7

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Introduction
“Pet owners and their pets or ... consumers and their owners?” – this is a good question. The answer depends on the relationship between owner and pet as well as on the motives of the owners who decided to get a pet. The following report deals with the relationship between owners and pets, with the motives of pet owners to have a pet and as well with the reasons why owners are willing to spend sums of money on their pets. Furthermore it will deal with some explanations for the high level of pet ownership in Australia and based on this with possible marketing strategies of pet shop retailers to get an advantage by using this information.

Insight
Pets are very popular all over the world. Of course there are differences between countries related to the type of pet as well as to the popularity rating. According to the Australian Companion Animal Council (2010) there is a cat or a dog in more than 63 % of the Australian households. Comparing this percentage to other countries of the world you can say that the percentage in the U.S. is very similar to Australia while the percentage of a European country (in this case the United Kingdom with 43 % of all households owning a pet) is distinctly lower (ACAC, 2010). Coming back to Australia, nearly two thirds of households owning a pet is definitely a very high percentage. But the pet market in Australia has got further potential – the ACAC (2010) stated that 53 % of the Australian households which do not have a pet yet would like to have one in the future. This might be a very interesting fact for the Australian pet industry. According to the ACAC (2010) the Australian pet owners spent AUD 6,021 million on their pets in 2009. The largest part of these expenses with 36.9 % are veterinary services, 30.3 % are expenses on pet food, 17.3 % are petcare services, 10.2 % pet purchases and 5.3 % petcare products. A very interesting fact is that estimated more than one third of all employees work in the pet care product sector (ACAC, 2010) while this is the sector with the smallest turnover. Although the petcare product sector had an increase in turnover of approximately 8.4 % from 2008 to 2009 (ACAC, 2010) there is still more growth potential in this sector.

Reasons for owners spending with reference to consumer behaviour theory
Reasons for this spending depend on the type of relationship between owner and pet as well as on the motives the owner had to get the pet. According to Hirschmann (1994) there are two broad categories of animals. The first category is animals as objects/products. This includes different

4 motives respectively different roles pets can “play”, such as animals as ornaments, status symbols, avocation, equipment or as people. These are prevailing selfish reasons and motives why owners have a pet and therefore the reasons why they spend all the money on their pets is to “feel more comfortable”. This allows the reference to Maslow’s hierarchy of needs (Maslow, cited in Quester et al, 2007). In this case the motives of consumers to spend money on their pets are driven by esteem needs (e.g. desire for status, self-respect and prestige). According to Hirschmann (1994) the second major category is animals as a companion or a friend. In this case the consumer has completely different motives to spend money on his pet. In this case they spend money on their pets because they often have a deep relationship to them and only want the best for their pets. One reason mentioned in the case study is that Australians changed their attitude about the importance of pet care and nutrition during the 1990s by transferring their own concerns about human nutrition onto their animals. Obviously there is a dependence between the way the owners act and the way they deal with their pets. This assumption is underpinned by the result of a survey (Ridgway et al, 2007) which states that there is also a relationship between the sum of money pet owners spend for their own and the sum of money they spend for their pets. The more money consumers spend for their own the more money they are willing to invest into food and accessories for their pets. This often leads to the questionable fact that pet owners (especially celebrities) treat their pet like a human. They dress them, do their hair and the like. Beverland et al (2006) described this phenomena as “the dark side of pet ownership” (Beverland et al, 2006, p7). According to Cote (2007) pets are a very good example to falsify the assumption that in buyer behaviour theory high involvement is automatically related to high knowledge. Often there is a high involvement of owners when it comes to buying decisions but a failure of understanding the real needs of the pets.

Reasons of pet ownership
In general there are several different reasons and explanations why people have a pet. There are two different types of reasons and explanations. The first type is some kind of conscious reason, which means that people are conscious about the reasons why they have a pet, for example pets as companions, dogs for security reasons or guide dogs as helpers. But maybe there is another type of reason which people often are not aware of. According to the ACAC (2010) there are a lot of health benefits having a pet like less visits at the doctor, lower cholesterol and lower blood pressure, a faster recovery from diseases, better dealing with stressful situations a lower risk when it comes to

5 heart diseases and much more. The people might not be aware of these benefits but they are also a reason why people all over the world have pets. Referring to the question why Australia has such a high level of pet ownership there are several explanations. One of the reasons might be that Australia is a very large country with a relatively small population which means that there are a lot of households which have much space for pets. According to Australia House & Garden (2005) furthermore pets are motivating their owners to exercise, keep them active and help them to relax. Maybe Australians have pets for these reasons because Australians are known as very active and sporty as well as laid-back people all over the world. Of course it could be the other way around as well - that the Australians are so active and laid-back because so many of them have pets. Another possible reason is the need for security. Due to the fact that many households in Australia (in the sparsely populated regions of Australia) have very large properties their need for a security dog might be very high. A further explanation might be the social aspect of animals. According to an Australian survey carried out by Wood, Giles-Corti, Bulsara, and Bosch (2007) pets (especially dogs) play a very important role when it comes to social interactions. According to Wood, Giles-Corti, Bulsara, and Bosch (2007) pets have a positive influence when it comes to favour exchanges, civic engagement, sense of community and much more. These might not only be Australian phenomena but if you compare it with the culture and behaviour in Germany, for example, the Australians are much more open minded and they have a larger desire for social interactions. Another reason is the family aspect. Families with small children often buy a dog for their kids as well as old people use to buy pets when their cohabitant has died.

Conclusion and impact on Retailers marketing strategy
Concluding one can say that Australia definitely has a very high percentage of pet ownership and that the market for pet food, pet care and pet accessories still has potential. As mentioned above there are two different types of pet owners. There are pet owners who consider their pets as products or objects and who are driven by selfish motives as well as pet owners who view their pets as companions and often as a peer partner or member of the family. This is a very important fact retailers should be aware of because referred to the retail mix it is existential when it comes to customer services, store design, assortments and communication mix. These two different types of customers are driven by completely different buyer behaviour motives. Consequently retailers must have different customer services, assortments and communication mixes, depending on the type of customer they want to address. An example for this is that a retailer who wants to address the “selfish pet owner” must have a communication mix which gives the customer the feeling of importance and exclusivity while the customer who regards his pet as a companion would probably

6 prefer a communication mix which is more harmonious and which facilitates a feeling of strong cohesion between owner and pet. So concluding one can say that four of the six parts of the retail mix depend on the motives of the customer to spend some money. The two remaining parts of the retail mix are pricing and the location. As mentioned above 53 % of the Australian population who are not owning a pet yet would like to have one in the future. So there is still potential for new retailers. For the right location they should take demographical research (e.g. income, buying power, rank and interests of the population in the region) into consideration to find the perfect location for their shop. Referring to pricing the retailers could start a survey and ask potential new customers (those who own a pet or would like to have one) how much they would be willing to pay for different services or products. This could help them to choose the right strategy when it comes to the pricing of their services and products.

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References
Australian Companion Animal Council. “Australians and their pets, The FACTs”. Australian Companion Animal Council (2009). “The Power of Pets – The benefits of companion animal ownership”. Australian Companion Animal Council (2010). “Contribution of the Pet Care Industry to the Australian Economy”, 7th Edition. Australian House & Garden (2005). “Pet Project”, Australian House & Garden, 1, 143-146. Beverland, M. B., Farrelly, F., Ai Ching Lim, E. (2006) “Exploring the dark side of pet ownership: Status- and control-based pet consumption”, Journal of Business Research, 61, 490-496. Cote, J. A. (2007).”Pets as means rather than ends”, Journal of Business Research, 61, 500-501. Hirschmann, E. C. (1994). “Consumers and Their Animal Companions”, Journal of Consumer Research, Vol. 20, 616-632. Quester, P., Neal, C., Pettigrew, S., Grimmer, M., Davis, T., Hawkins, D. (2007). “Consumer Behaviour”. North Ryde, NSW, Australia: McGraw-Hill Pty Ltd. Ridgway, N.M., Kukar-Kinney, M., Monroe, K. B., Chamberlin, E. (2007). “Does excessive buying for self relate to spending on pets?”, Journal of Business Research, 61, 392-396. Wood, L. J., Giles-Corti, B., Bulsara, M. K., Bosch, D. A. (2007). “More Than a Furry Companion: The Ripple Effect of Companion Animals on Neighborhood Interactions and Sense of Community”, Society and Animals, 15, 43-56.

References: Australian Companion Animal Council. “Australians and their pets, The FACTs”. Australian Companion Animal Council (2009). “The Power of Pets – The benefits of companion animal ownership”. Australian Companion Animal Council (2010). “Contribution of the Pet Care Industry to the Australian Economy”, 7th Edition. Australian House & Garden (2005). “Pet Project”, Australian House & Garden, 1, 143-146. Beverland, M. B., Farrelly, F., Ai Ching Lim, E. (2006) “Exploring the dark side of pet ownership: Status- and control-based pet consumption”, Journal of Business Research, 61, 490-496. Cote, J. A. (2007).”Pets as means rather than ends”, Journal of Business Research, 61, 500-501. Hirschmann, E. C. (1994). “Consumers and Their Animal Companions”, Journal of Consumer Research, Vol. 20, 616-632. Quester, P., Neal, C., Pettigrew, S., Grimmer, M., Davis, T., Hawkins, D. (2007). “Consumer Behaviour”. North Ryde, NSW, Australia: McGraw-Hill Pty Ltd. Ridgway, N.M., Kukar-Kinney, M., Monroe, K. B., Chamberlin, E. (2007). “Does excessive buying for self relate to spending on pets?”, Journal of Business Research, 61, 392-396. Wood, L. J., Giles-Corti, B., Bulsara, M. K., Bosch, D. A. (2007). “More Than a Furry Companion: The Ripple Effect of Companion Animals on Neighborhood Interactions and Sense of Community”, Society and Animals, 15, 43-56.