Phase Report Example

Progress Phase Report: Phase 1
MKTG304 – Friday 10am Andrew West

Table of Contents
Introduction ............................................................................................................................................. 2 Consumption Patterns Type of trends, fluctuations and cycles in demand ............................................. 2 Consumer ................................................................................................................................................ 2 Who Buys and Consumes ................................................................................................................... 2 Segmenting Variables ......................................................................................................................... 3 Consumer Buying Behaviour .................................................................................................................. 4 Environmental Impacts on Demand ........................................................................................................ 5 Buyer Power Section of Porters 5 Forces ............................................................................................... 7 BOS Models ............................................................................................................................................ 7 3 tiers of Non-Customer ..................................................................................................................... 7 Buyer Utility Matrix ............................................................................................................................. 7 Reference List.......................................................................................................................................... 9 Appendix ............................................................................................................................................... 11

Introduction
The “Finish” range by Reckitt Benckiser are a range of products to cater to consumer dishwashing needs. The three ranges of products include tablets, detergents and additives. The following report will examine Phase 1, the basic demand conditions for “Finish.” We will focus on the consumer and their consumption patterns, their segmenting variables, consumer behaviour and environmental impacts on demand. Finally, the buyer power of porters 5 forces will be examined along with a blue ocean strategic model – 3 tiers of noncustomer and buyer utility matrix.

Consumption Patterns
Type of trends, fluctuations and cycles in demand The types of trends, fluctuations and cycles in demand for “Finish” dishwashing products greatly depend on the demand cycle for dishwashers themselves. Reckitt Benckiser, revealed on a visit to Australia: “It’s not just about selling Finish, it’s very much about driving the take-up of dishwashers” (Cadman, P 2012). The demand for the use of dishwashers are effected by a number of factors; these include, Environmental trends o water usage o power usage o potential environmental harm Economic trends o people may use their dishwashers less in the belief it may save them money on bills. o Price of energy may also influence the fluctuation of dishwasher usage Socio-cultural trends o Consumers are more time-efficient and dishwashers save time o Environmental issues

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The fluctuation of the use of dishwashers determined by the factors above, are directly parallel to that of finish products. By identifying and understanding the demand cycle for dishwashers, we are able to clearly identify the demand cycle for finish products. Figure 1 illustrates factors considered when purchasing dishwashers.

Consumer
Who Buys and Consumes The buyers of “Finish” can be categorised as consumers who are attracted to quality, trusted products. They believe quality is most important, tend not to be deterred by price and trust well-known brands rather than store brands The target market for finish products, identified by Reckitt Benckiser, are mothers with 2 or more children.

Segmenting Variables Geographic According to the Australian Bureau of Statistics “dishwashers were more common in Australian capital cities and surrounding areas (67%)” (ABS, 2012). Furthermore the “proportion of households with dishwashers increased by 9 percentage points since 2005 (42% in 2005, 45% in 2008 and 51% in 2011)” (ABS, 2012). Demographic Females o 27+ o 2 or more children Men o Single and or living with other males Young households (single, shared) o Students

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Psychographic With many people “going green,” advertising environmentally friendly dishwashing liquid choices are becoming popular. According to the Food Advertising Network (2011), “There has been a huge growth in general awareness around the subject of “going green” and leading a more ecofriendly lifestyle and this gives dishwashing liquid brands the chance to advertise greener options to their audience.” Behavioural Time conscious Loyal customers Consumers who believe the product is beneficial to them economically both monetary and lifestyle-wise

“Today’s consumers don’t have the time to spend on laundry that they did 20 or 30 years ago,” RB says. “They also don’t want to do this overnight soaking thing and then dump everything back into the machine. That’s a very painful exercise” (Cadman, P 2012). VALS Retail research (The Australian Centre for Retail Studies, 2010), suggests that the Australian consumer behaviour can be identified under the VALS framework (figure 2) as “believers” and/or “strivers”. The consumer and potential customers of finish products can be categorised into the “believers” and/or “strivers” lifestyle type under the VALS framework. The current market believes that finish products are the best in the market, powerful and best performing. These attributes that the market sees reflects their belief for the product as well as striving above competitors as the “best” in the industry.

Consumer Buying Behaviour
Buying process Figure 3 illustrates the five stages of consumer behaviour. By understanding and identifying each stage, marketing for “Finish” products can be easily customized to capture the greatest number of potential customers. Stage 1 o The need for cleaner dishes o The need for time and/or economic efficiency Stage 2 o Where information can be accessed (see below) Stage 3 o What alternatives are available (see below) Stage 4 o Low involvement purchase o Frequent purchase and/or repurchase – loyal customers of “Finish” o Beliefs upon brand image and/or product due to marketing campaigns and/or word of mouth (see “existing knowledge and beliefs” below) Stage 5 o Customer evaluation of the product  Will they buy again or cease purchase?  Encourage word-of-mouth?

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Alternatives Other dishwashing products - competitors Home-made dishwashing products Hand-washing dishes

Information sources Finish currently reaches their target audience through a number of marketing outlets. These include Print media Billboards In the mall In the store At the shelf

Decision criteria Cost o Product o Water usage o Power usage

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Performance o Toughness o Reliability o Quality Environmental impacts Time saving o Alternative to hand washing dishes Socio-cultural o Buying the product for other family member to benefit them Brand image o Trust o Superiority o loyalty

Existing knowledge and beliefs Good - Powerful - Scientific - Performance - The “best” in the market - Tough - Reliable - Great quality - Trusted (Reckitt Benckiser, 2012) Bad Boring Aloof Expensive Uninteresting Snobby

Environmental Impacts on Demand
Socio-cultural Australian society today is more time efficient and this may affect demand in a positive manner as the product allows consumers to complete tasks in short time. Statistics (Austats, 2012) also reveal that Australia’s growing economy and expanding population has led to increase energy use. “While energy use affects household and business related costs, it also impacts the environment, accounting for 77% of Australia’s greenhouse emissions” (Austats, 2012). This may have a negative impact on demand as consumers may reduce and/or eliminate the use of finish products as they become more environmentally and economically aware (discussed below). Economic Research (Inside Story, 2012) reveals that consumers today are higher savers than they were previously. This is due to a number of factors including uncertainty over interest rate changes, consumer desire for debt reduction, increase difficulty in borrowing money, slowing property prices and effects of GFC. This in-turn has resulted in weaker retail spending and consumers making higher economic focused decisions.

Finish products, as well as other dishwashing product, may face a negative effect on demand due to the nation’s economic situation. As a luxury good, consumers may find cheaper alternatives or reduce the frequency of purchase for such products. Environmental Many consumers are conforming to the societal trend of environmental awareness (AFAN, 2011). According to Mitchell (2009), there are three main problems with dishwashers that have a harmful effect on the environment. These are: water usage, power usage and chemicals used in the detergents. These factors may affect the demand of finish products as the consumer may feel limiting or eliminating the use of dishwashers, and the finish products, will be beneficial to them and the environment. Contrary to this, consumers may also be seeking more environmentally products such as “Finish” who do not contain harmful chemicals found in other similar products. Regulations Australian Consumer Law (ACL) Legislative piece that provides information on what the prohibition on misleading and deceptive means for marketing communications. Predominantly about consumer protection  Anti-competitive conduct  Misleading conduct

Technology “Technological advances have continued to improve the cleaning and water efficiency of automatic dishwashers” (Emmel, J 2011). These technological innovations, evident in new dishwashers, may attract customers hence providing a larger potential customer base for “Finish” products and thus have a positive effect upon demand. The new steam cleaning range of dishwashing technology does not require the presence of cleaning chemicals and/or additives (Reuters 2008). The increase in steam dishwashing may attract new and current dishwasher customers who feel it is a more environmentally friendly alternative. This consequentially may have a negative effect upon the demand of finish products. Relevant infrastructure Media o (see “information sources” above) Finance o Investors/shareholders Transport o internal

Buyer Power Section of Porters 5 Forces
Under the buyer power section of Porters 5 forces (figure 4) the “importance of the product to the buyer” and “product differentiation” points can be focused. Current customers of “Finish” products see its importance and differentiation in; reducing time needed to complete tasks its ability to perform above expectations reliability quality trusted brand superiority

BOS Models
3 tiers of Non-Customer
The key to achieving Blue Ocean is for the company to find ways to reach beyond existing customers and appeal to non-customers. The 3 tiers of non-customer (figure 5) will be identified in order to capture non-customers allowing the ability to increase demand for “Finish” products. Tier 1 Consumers who feel the product is to expensive They are content with their current methods of dishwashing and see no requirement for “Finish” products.

Tier 2 Tier 3 Consumers who do not own dishwashers Consumers who do not require the product such as children Consumers who believe “Finish” products are unnecessary goods Consumers who believe dishwashing products are significantly harmful to the environment Consumers who are economically conscious

Buyer Utility Matrix
Figure 6 illustrates the buyer utility matrix for “Finish” products. Each cell that is not filled presents a different approach available to inventing a new or improved product. Simplicity The use of “Finish” products does not require any high cognitive involvement from purchase to disposal. “Finish” products are a simple “plug-and-play” product.

Fun and Image Consumers believe that “Finish” products are the “best” dishwashing products available, this is due to its quality, performance, reliability and power.

Environmentally Friendliness “Finish” products use “ingredients that are either non-toxic or biodegradable or both. All products use recyclable packaging that meets recyclability standards. Research and development efforts are ongoing and always involve the study and use of base oils and cleaning solvents that are biodegradable and/or derived from renewable resources” (Reckitt Benckiser, 2011).

Reference List
Cadman, P 2012, Beyond Brand, Heidrick & Struggles, viewed 3 October 2012, Cadman, P 2012, Beyond Brand: How Today’s Marketing Directors Have To Drive Category Growth, B&T, viewed 3 October 2012, < http://www.bandt.com.au/opinion/beyond-brandhow-today-s-marketing-directors-have-> Food Advertising Network 2011, Advertising Dishwashing Liquid, Gourmet Ads, viewed 4 October 2012, http://www.gourmetads.com/blog/advertising-dishwashing-liquid The Australian Centre for Retail Studies 2010, Australian Consumer Trends, ACRS Secondary Research Report, viewed 5 October 2012, Inside Story 2012, The Economic Situation in Australia, Inside Reputation Bulletin, viewed 7 October 2012, < http://insidestory.com.au/_uploads/documents/INSIDE%20REPUTATION%20%20Australia%27s%20economic%20situation%20-%20February%202012.pdf> Mitchell, P 2009, The Effects of Dishwashers on the Environment, Helium Publications, viewed at 7 October 2012, < http://www.helium.com/items/1313403-the-effects-ofdishwashers-on-the-environment> Reckitt Benckiser, 2011, Questions and Answers, Our Home Our Planet, viewed 7 October 2012, Reckitt Benckiser, 2012, Who Are We, Reckitt Benckiser Presentation , Lecture 3, Macquarie University, Unpublished Emmel, J 2011, Dishwashing and Water Conservation: An Opportunity for Environmental Education, Journal of Extension, viewed at 8 October 2012, < http://www.joe.org/joe/2003february/rb3.php> Reuters 2008, Consumer Reports’ Test Reveal With Steam Are Not So Hot, Reuters, US, viewed at 8 October 2012, < http://www.reuters.com/article/2008/02/05/idUS174262+05Feb-2008+PRN20080205> SBI 2009, US Framework and VALS Types, Strategic Business Insights, viewed at 7 October 2012, < http://www.strategicbusinessinsights.com/vals/ustypes.shtml> Rohan 2008, Consumer Purchase Decision Process, Consumer Behaviour, viewed at 8 October 2012, < http://www-rohan.sdsu.edu/~renglish/370/notes/chapt05/>

Strategic Advantage, 2012, Porters 5 Forces Diagram, Strategy4U, viewed at 8 October 2012, Clipper 2007, Blue Ocean Detail, PS Clipper, viewed at 8 October 2012, ABS 2012, Household Appliances, Australia Bureau of Statistics, viewed at 12 October 2012, Austats 2012, Household Energy Use and Costs, Australian Social Trends September 2012, Australian Bureau of Statistics, viewed at 12 October 2012, ABS 2011, Environmental Issues: Energy Use and Conservation, Australian Bureau of Statistics, viewed at 12 October 2012,

Appendix

Figure 1 – (ABS, 2011)

Figure 2 - (SBI, 2009)

Figure 3 - (Rohan, 2008)

Figure 4 - (Strategic Advantage, 2012)

Figure 5 - (Clipper 2007)

Figure 6 – Buyer Utility Matrix (“Finish” products)