MMK266 Consumer Behaviour Research Report

COUNTRY ROAD

NAME – Mihali Tamvakis

Student ID –213282092

Word count: 3982

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2 TABLE OF CONTENTS

3.0 Introduction and the New Consumer Product………………………............................3

3.1 Organisational Background……………………………………..........................................3

3.2 New Consumer Product…………………………………………………………….4

3.3 Target Market Profile……………………………………………………………..4-5

4.0 Issues Facing Consumers in Adopting this Product……………………………….…..5

4.1 Positive Consumer Issues………………………………………………………….........5-6

4.1.1 Decision-Making…………………………………………………………...........5-6

4.1.2 Social Need to Own a Smartphone and Family Influences………………...........6-7

4.2 Negative Consumer Issues………………………………………………………..........….8

4.2.1 Economic circumstances…………………………………………………...............8

4.2.2 Age Group and Learning…………………………………………………...........8-9

5.0 Consumer Response to These Issues……………………………………………………9

5.1 Four Consumer Interviews…………………………………………………………..........9

5.1.1 Informant’s characteristics……………………………………………………..…..9

5.1.2 Primary data collection……………………………………………………………10

5.1.3 Questions.................................................................................................................10

5.1.4 Informant 1 answers................................................................................................11

5.1.5 Informant 2 answers................................................................................................11

5.1.6 Informant 3 answers................................................................................................12

5.1.7 Informant 4 answers................................................................................................12

5.2 Analysis and Implications…………………………………..............................................13

6.0 Recommendations and Conclusions………………………………………………..13-14

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7.0 References…………………………………………………………………………………

3.0 Introduction and the New Consumer Product

The aim and purpose of this report is to discuss the organisational background of Country
Road and talk about what their business currently offers to consumers. This report will also
discuss a new product that Country Road does not currently offer that other organisations do
and how Consumers might behave towards the introduction of this new product. It is essential
that every organisation’s Marketing department devote time to Market Research to gather
information and understand how consumers behave and what their preferences in the market
may be especially before an organisation introduces a new product or service. This report will
also discuss the issues Facing Consumers in Adopting this Product, their responses to these
issues and will provide informed recommendations on whether Country Road should
consider offering this new product to consumers.

3.1 Organisational Background

As stated on countryroad.com.au - Country Road began in 1974 as a niche women’s shirting

business. Since then Country Road has developed into one of Australia’s first lifestyle brand
for men, women and children and for the household. Country Road is best known for its
stylish and good quality clothing, home ware and accessories. Woolworths Holdings Limited
(South Africa) took over in 1998. In 2004 Country Road gave their business a whole look by
creating a more modern range of products. In 2009 Trenery was launched. Trenery is a range
of simple and sophisticated collections that come across as classic and modern. In September
2014, Woolworths Holdings Limited took over all shares in Country Road. Today Country
Road offer all types of clothing, shoes and accessories for men women and children and also
offer products for the home including products for the bed and bath, children’s bedding,
home accessories and tableware. The only product line that Country Road do not seem to
offer that would be plausible is an electrical devices and appliances line of products such as
electrical appliances for the home – blenders, toasters coffee machines etc… or devices such
as Smartphones, mp3 players, home audio, speakers and docks, tablets, computers etc…

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3.2 New Consumer Product

The plausible new product that Country Road could consider introducing to their store to start
off their electrical device line is their own Smartphone or to buy out another companies
Smartphone division. Smartphones have become very popular in today’s society. Their
multifunctional technology has people surfing the internet, interacting on social networking
sites, listening to music and many other functions that Smartphones allow people to do.
Margin Media 2013 suggests that 51% of Australian Smartphone owners use search (e.g
Google) to search for product information 61%, restaurants, pubs and bars 43%, travel 34%,
job offers 23% and apartments and housing information 23%, 68% like to watch videos such
as those on YouTube, 14% of which watch at least one video each day while 78% spend time
on social networking sites like Facebook and Twitter. It is pretty clear that Smartphones are
becoming a need in today’s society because Smartphones are consuming up people’s time
with all the different functions they offer. Smartphones have been incorporated in to people’s
daily lives. People use their Smartphone to communicate as the original purpose of a mobile
phone was intended, whether that would be online or via text messaging and phone calling. It
is also used for online banking, sending and receiving emails and can be used as a GPS. It’s
basically a computer in your pocket that makes life more convenient for people. According to
thinkinsights.com 93% of consumers use their Smartphones at home, 87% use them on the go
(walking etc…), 77% use them in a store, 73% use them in Restaurants, 72% use them at
work, 66% at social gatherings, 54% at coffee shops, 53% in a doctor’s office, 50% at an
airport, 32% in a library and 29% at school and 72% use their Smartphones while consuming
other media such as listening to music, watching Television etc.... thinkinsights.com also
suggests that Smartphones help people with their day to day lives by staying connected to
social sites, email, researching and reading news, navigating, keep people entertained and
managing and planning. People can also shop with their Smartphones. It is quite obvious that
Smartphones have become a major part of people’s lives. Smartphones are forever being
innovated and if Country Road were to introduce a Smartphone with some kind of innovation
that’s appealing to consumers they could easily take over the Smartphone market. Country
Road could offer their consumers discounts on certain items in their store if they were to
purchase their Smartphones from their store. The reason why they should introduce such a
product is because it is in such high demand and people who own a mobile phone majority of
them own a Smartphone. If it’s promoted well Country Road shouldn’t have any issues
making sales.

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3.3 Target Market Profile

Because Country Road’s products are now known for being sophisticated, modern and
fashionable which would appeal to a younger group of consumers. Country Road would be
targeting the consumers that they already target with their clothing lines. According to Sharp
2009, Country Road began targeting the ages between 25-40 just before their net profit went
up by 60.4%.So their target market would be between the ages of 25-40. That’s not to say
that people younger than 25 and older than 40 wouldn’t purchase one of their Smartphones.
They would basically be targeting those who they already target with their clothing lines –
People between the ages of 25-40. Offering Smartphones in their store they would also attract
people who may not be Country Road customers. If they were to attract people outside of
their target market, this might also boost their sales in clothing.

4.0 Issues Facing Consumers in Adopting this Product

This report will provide (4) consumer issues that are considered positive and negative
consumer issues or facilitators and barriers.

4.1Positive Consumer Issues.

4.1.1 Decision-Making.

Consumers see decision making as a positive issue when it comes to buying a Smartphone
because they can see what each Smartphone offers and which one suits their needs most and
being that there is a wide range of Smartphones, each one offers something different. So
consumers can evaluate the alternative brands of Smartphones available to them on the
market whether this is through a company’s website, asking their friends on their personal
experience with a particular phone or going in to a store and having staff inform them about
each phone and assisting them in finding a phone which suits them best. Writers 2014
suggests that the number one thing consumers look for when they shop for their smartphones
is the battery life of the phone. According to Writers 2014 over 50% of mobile phone buyers
consider the life span of the phone’s battery as the main reason for selecting the phone that

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they bought. Writers 2014 also suggests that brand loyalty is another factor involved with the
purchasing of Smartphones with Apple being listed by consumers as the main reason for
buying their iPhone over an Android or Windows device. Writers 2014 suggests that the main
factors consumers consider before buying a phone other than its battery life are, its ease of
use, whether it’s touchscreen or not, its screen size, operating system, camera resolution, its
brand, web browsing speed and its weight and size. Warren 2011, suggests that mobile
phones are one of the biggest drivers to innovate technology and also mentions that it has
gone beyond consumers deciding whether they should buy a Smartphone or not, the new
question now is why consumers choose one Smartphone over the other. Warren 2011, states
that 24% of consumers who own a Mobile phone get a replacement phone at least once a
year. This is great for any mobile phone business. Warren 2011, suggests that some of the
main features consumers look out for when upgrading their Mobiles or Smartphones other
than those listed above are whether it has 4G, this is a mobile communications standard
which allows wireless internet access at a much higher speed. Warren 2011 also suggests that
Video calling, large screens and GPS are factors which attract consumers when deciding what
Smartphone to purchase. Most of these features now come with most Smartphones.So the
main factors consumers would consider when purchasing a Smartphone would be its screen
size, ease of use and most likely the brand that they have stayed loyal to if it offers as much if
not more than other mobile phones on the market. According to Chiffman, O’Cass, Paladino
and Carlson 2014, other factors which influence consumer decision making are the way a
firm’s product has been promoted, its price, a consumers social class, their perception and
consumer’s needs. Warren 2011 suggests that the adoption of Smartphones is increasing,
however, there are still factors which are preventing Smartphones from taking over the
mobile phone industry. According to Warren 2011 it’s the older generations such as the baby
boomer generation that are less likely to make the decision of purchasing a Smartphone
because they do not seem to have a need for the added features. There is definitely an
opportunity there to market to, however, Country Road appeal to a younger generation of
buyers. If Country Road are able to come up with a design and offer features and innovations
that satisfy consumer’s needs and wants, there will most likely be a demand for this
Smartphone.

4.1.2 Social Need to Own a Smartphone and Family Influences

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Hassan 2014 suggests that one of the positive issues involved with Smartphones is the Social
need of owning one. Hassan 2014 suggests that Smartphones have changed the way we all
live in a huge way, the way we shop, purchase, play and connect with our friends and the
world. Hassan 2014, also suggests that with all the different features and apps Smartphones
have to offer, it allows people to communicate and interact with others more conveniently
and effectively without geographical limitations. Consumers can communicate via phone
calls, video calls, text messaging, imessage (free text messaging function for iPhone owners),
Twitter, Facebook, Snapchat and many other communication features and apps. So if
consumers know a friend or anyone in general who owns a Smartphone with all these
features they’ll feel the need to own one as well being that a Smartphone just makes people’s
day to day lives so much more convenient. More and more businesses are now promoting
online and without a phone that has all these apps and internet access people will most likely
miss out on what’s new in regards to news and events. Consumers are always talking about
what they saw online or on Facebook or Twitter. Someone who doesn’t have a Smartphone to
access these social networking sites will feel left out and will not feel included when such a
subject is brought up among friends. This is a reason why more adopt Smartphones. They
may still have computers and be a part of these social networking sites, however, they won’t
be able to conveniently access them without going home or searching for a computer to keep
up to date with the latest news. Elogie 2015 suggests that the main group of citizens who
have adopted Smartphones are undergraduate students being that Smartphones have the
capability of giving instant information to students and are able to be used for many
technological functions which is all packed up in to one small portable device that fits in
people’s pockets. So to be able to have all these functions all in one device there is no doubt
that there will definitely be a demand for Smartphones on a huge scale. Nagarkoti 2009
suggests that people interact with one another to come up with better solutions and suggests
that the way consumers behave is influenced by social factors such as family, roles, groups
and status. According to Nagarkoti 2009 Family plays a big role in Consumer Buyer
Behaviour. He mentions that family is the most important social influence for many
consumers because they share similar values and attitudes. Nagarkoti 2009 suggests that
family has always been responsible with children have the norms and values that they do
because they are passed down from their parents. He states that the way in which children
learn throughout their lives to become consumers can be the direct result of the influence that
their family has had over them. If a consumers friends and their families own a smartphone
the likelihood of the consumer getting a Smartphone is high.

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4.2 Negative Consumer Issues

4.2.1 Economic Circumstances

The amount of disposable income a consumer has, plays a role in what they purchase and
how much they are able to spend on certain products. This can be seen as a negative issue
when consumers shop for a Smartphone because they may not be able to purchase the latest
technology that many other consumers are paying for. Nagarkoti 2009 suggests that any
consumer who has a large amount of disposable income will purchase products which are
expensive and premium. Obviously consumers who don’t have as much disposable income
will have to settle for items which aren’t as expensive and don’t come with all the added
features that a top of the range item would have. Nagarkoti 2009 also suggests that consumers
who have a large amount of disposable income would be looking to spend it towards luxury
items or something that will improve their standard of living, however, those who don’t have
as much money to spend will be only looking to spend their money on day to day needs, for
example, groceries. Therefore the economic circumstances of consumers plays a role in the
purchasing power that they have. Nagarkoti 2009 also suggests that marketers target the high
income earners who have more disposable income with items that are expensive and target
consumers who earn less with items that aren’t as expensive. So in order to attract consumers
to purchase a Smartphone it must have all the latest technology, be easy to use and the value
must exceed the cost of it. It also must be priced reasonably so the lower income earners are
able to afford this Smartphone. This should create higher sales and make this products a
success.

4.2.2 Age Groups and Learning.

When consumers reach a certain age their needs and wants begin to change and adapting to
new technology can’t always be interesting to them and isn’t as important as it once was.
Smith 2014 suggests that older generations statistically don’t really use new technology much
at all. Smith 2014 also suggests that older groups of people have health issues that can make

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the adoption of new technology a challenge and also mentions that reading can be difficult
and challenging. According to Smith 2014, majority of the older generations have said that
they would need assistance in learning how to use Smartphones. If they are unable to
understand and adapt to new technology there wouldn’t be a need for them to have a
Smartphone. Something more basic would be ideal for this group of consumers. Smith 2014
suggests that some older consumers aren’t interested in new technology at all and have also
said that they don’t feel that they are missing out on much. This is because as people get
older their priorities change and they no longer feel the need to be up to date with the latest
technology because their main focus is their health and their families. This definitely falls
under the category of a negative consumer issue because as consumers get older they become
whole process of learning how to use Smartphones and the internet turns the consumers off
adopting this product and service. Older consumers have been using products that have been
so much simpler over the years which contributes to their disinterest in Smartphones. This is
why the main target market for this product is below forty years of age because they aren’t
under the same circumstances as older people who have difficulties in adopting Smartphones.

5.0 Consumer Response to These Issues

5.1 Four Consumer Interviews

Four representatives of the primary target market were interviewed in regards to the four
issues (Decision making, Social Needs, Economic Circumstances, Age Group and Learning).
The data has been analysed to provide implications for Country Road.

5.1.1 Informant’s Characteristics

The characteristics of the informants that are most significant to qualify them as the
representatives of the proposed target market include – Age and yearly income

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5.1.2 Primary Data Collection

  Informant 1 Informant 2 Informant 3 Informant 4

Age 25 28 37 40

Gender Female Male Female Male

Geographic
Location Melbourne Melbourne Melbourne Melbourne

Yearly Income $50,000 $80,000 $70,000 $95,000

Smartphone
Owner Yes Yes Yes No
Mobile Phone
Brand iPhone iPhone Samsung Nokia

5.1.3 Questions

1. How old are you?

2. Do you own a Smartphone? why?

3. What brand is your mobile phone?

4. What are the best features of your mobile phone?

5. What made you buy your particular mobile phone?

6. Are you satisfied with your mobile phone? Why?

7. Have you owned other brands before?

8. Has the brand name influenced your purchase decision?

9. If something better was released and easy to use would you consider purchasing it?

5.1.4 Informant 1 answers

1. How old are you? I am 25 years old

2. Do you own a Smartphone? why? Yes, because there are heaps of cool apps and you can
access the internet and Facebook and search for cool stuff.

3. What brand and model is your mobile phone? I have an iPhone 4

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4. What are the best features of your mobile phone? The best features would have to be the
apps that the app store offers, internet access.

5. What made/convinced you to buy your particular mobile phone? Nearly everyone I knew
had either an iPhone 4 or 5 and said that is was a good reliable phone. I would have bought
the 5 but the 4 was cheaper.

6. Are you satisfied with your mobile phone? Why? Yes, it’s a reliable phone and the battery
life on it is quite good.

7. Have you owned other brands before? Yes, before the iPhone came out I owned just a
basic Nokia phone but I’ve had an iPhone ever since the iPhone 4 was released.

8. Has the brand name influenced your purchase decision? Yes

9. If something better was released and easy to use would you consider purchasing it? If it’s
affordable then yes

5.1.5 Informant 2 answers

1. How old are you? 28 years old

2. Do you own a Smartphone? why? Yes, because it’s like a computer in your pocket and has
great apps.

3. What brand is your mobile phone? I own an iPhone 5s

4. What are the best features of your mobile phone? The apps, screen size, internet access,
camera quality

5. What made/convinced you buy your particular mobile phone? Needed a new phone

6. Are you satisfied with your mobile phone? Why? Yes and no. It’s a reliable phone apart
from how easy it is to break the screen and the battery life isn’t very good but it’s easy to use

7. Have you owned other brands before? Yes but ever since the iPhone came out I haven’t
looked at another brand because it’s easy to use unlike the Samsung.

8. Has the brand name influenced your purchase decision? Yes

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9. If something better was released and easy to use would you consider purchasing it?
Probably

5.1.6 Informant 3 answers

1. How old are you? I am 37

2. Do you own a Smartphone? why? Yes, every does

3. What brand is your mobile phone? Samsung Galaxy S5

4. What are the best features of your mobile phone? The screen size, camera quality and it’s
water resistant and has great battery life.

5. What made/convinced you buy your particular mobile phone? Wanted to try something
different

6. Are you satisfied with your mobile phone? Why? Yes but still trying to get used to it the
iPhone was easier to use.

7. Have you owned other brands before? Yes iPhone 5

8. Has the brand name influenced your purchase decision? No

9. If something better was released and easy to use would you consider purchasing it? Yes

5.1.7 Informant 4 answers

1. How old are you? I’m 40 years old

2. Do you own a Smartphone? why? No, too complicated, all I need a phone for is calls and
text messaging. All the added functions are time wasters.

3. What brand is your mobile phone? Nokia

4. What are the best features of your mobile phone? Nothing really, I just want to make calls
and text people but it’s easy to use.

5. What made/convinced you buy your particular mobile phone? To make calls and text
people and Nokia is a good brand

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6. Are you satisfied with your mobile phone? Why? Yes, it’s reliable

7. Have you owned other brands before? No

8. Has the brand name influenced your purchase decision? Yes

9. If something better was released and easy to use would you consider purchasing it?
Probably not.

5.2 Analysis and Implications

Based on all the informants’ answers it seems that the most popular Smartphone was the
iPhone. They seemed to like the apps and the fact that it’s like a “computer in your pocket”.
Informant 2 and 3 like the bigger screen size, however, Informant 1 has the iPhone 4 which
has a smaller screen but would like to upgrade. Informant 1, 2 and 4’s purchases have been
influenced by the brand name of the phone. So it seems like there is brand loyalty involved
with these purchase decisions, however, 3 out of the 4 Informants agreed that they would
most likely upgrade if there were a better phone on the market which is easier to use. This
suggests that people are willing to try new products. Informant 4 seemed disinterested in
Smartphones all together suggesting that he may be a part of an age group who aren’t willing
to adopt the latest technology. Informant 3 has owned both an iPhone and a Samsung and has
found the Samsung to be a little difficult in getting used to and Informant 1 made her decision
based on the limited amount of money she has to spend because she only earns $50,000 per
annum. So this suggests that economic circumstances play a major role in consumer’s
purchasing decisions. It’s seems that the four consumer issues do play a role in the
purchasing decisions of Smartphones and the likelihood of adopting a new Smartphone is
quite likely if targeted to younger generations and at a reasonable price, however, this new
phone must offer the consumer some sort of image by owning it.

6.0 Recommendations and Conclusions

In conclusion this report recommends that Country Road should consider introducing such a
product because consumers a willing to try new products which have been innovated and are
easy to use and they already appeal to an age group of people that Smartphones appeal to,
however, this report has also shown that when it comes down to consumer purchasing

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decisions there is brand loyalty involved. Smartphones have become a major part of people’s
lives and any big company should consider introducing their own. It is a risk based on the
competition in the Smartphone industry but with a great idea, innovation, the right promotion
and identifying consumer’s needs and wants, it is quite possible to be able to have the highest
percentage in the market share for Smartphones. This report has also shown based on the
informant’s answers that consumers do purchase items to fulfil social needs and some make
their purchase decisions based on the amount of income they earn. It has also shown that
consumers of certain age groups aren’t interested in having the latest technology and want to
own a mobile phone for its original purpose of calling people.

7.0 References

Elogie, A 2015, ‘Factors influencing the adoption of smartphones among undergraduate

students in ambrose alli university, ekopoma, Nigeria’, August 2015,
< http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=3367&context=libphilprac>

Hassan, M 2014,’Consumer Attitudes and Intentions to Adopt Smartphone Apps: Case of

business Students’, Pakistan Journal of Commerce and Social Sciences, vol. 8, no. 20,
http://www.jespk.net/publications/207.pdf

Margin Media 2014, ‘Australia Mobile Marketing Statistics’, retrieved 8th May 2013,
http://blog.marginmedia.com.au/Our-Blog/bid/93665/Australian-Mobile-Marketing-Statistics

Nagarkoti, B 2009, Factors Influencing Consumer Behaviour of Smartphone Users,

ARCADA,
< https://www.theseus.fi/bitstream/handle/10024/70466/Nagarkoti_Bishal.pdf?sequence=1 >

Schiffman,L, O’Cass, A, Paladino, A, Carlson, J 2014, Consumer Behaviour, Pearsons

Australia Group Pty Ltd, New South Wales.

Smith, A 2014, Attitudes, Impacts, and Barriers to Adoption, PewResearchCenter, April 3rd
2014, < http://www.pewinternet.org/2014/04/03/attitudes-impacts-and-barriers-to-adoption/ >

Warren, C 2011, How and Why Consumers Choose a Smartphone, MashableAustralia,

September 8th 2011, < http://mashable.com/2011/09/07/consumers-smartphone/ >

Writers, S 2014, Battery life is what consumers care about most when buying a smartphone,
news.com.au, May 13th 2014,

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< http://www.news.com.au/technology/gadgets/battery-life-is-what-consumers-care-about-
most-when-buying-a-smartphone/story-fn6vihic-1226915962555 >

www.countryroad.com.au/information-pages/our-history

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