Chapter Objectives

1. To understand the role consumer behavior plays in the development and implementation of advertising and promotional programs.

2. To understand the consumer decision-making process and how it varies for different types of purchases.

3. To understand various internal psychological processes, their influence on consumer decision making, and implications for advertising and promotion.

4. To recognize the various approaches to studying the consumer learning process and their implications for advertising and promotion.

5. To recognize external factors such as culture, social class, group influences, and situational determinants and how they affect consumer behavior.

6. To understand alternative approaches to studying consumer behavior.

Energy Drinks: The Real Thing or Just Bull?

Forget about the cola wars between Pepsi and Coke. The new threat to the stagnant cola mar

ket is an international cult drink—and that's no bull—it's Red Bull, actually. And the large soft-drink manufacturers have taken notice.

Red Bull is just one of the many "energy" drinks now on the market. Others include Extreme Energy Shot, Venom, Dark Dog, Energy, AMP, and KMX, just to mention a few. In fact, it seems that every company wants to introduce its own energy drink in an attempt to take advantage of a new market that is growing at an amazing rate. Consider that when Red Bull first introduced its product in 1997, there was no such thing as an energy-drink category. By 2001, estimates are that the market was somewhere between $140 million to $200 million, with fore casts that it will be $500 million in just a few years. Also consider that Red Bull has about 70 percent of the market share. While these figures may pale in comparison to the overall carbonated-beverage market (approximately $45 billion), there is enough concern for competitors to take notice.

Red Bull has been variously described as "an international cult drink," "a kinky concoction," and "the new sex drink," all of which suit the company just fine. It is exactly the mystique attributed to the drink that helps create the "buzz" that makes it sell. Many marketers feel that it is Red Bull's alternative image that accounts for much of its success. Even the company's marketing department likes to maintain the illusions while claiming the product is a "nonmarketed brand."

But while the mystique part of Red Bull may be true, the "nonmarketed" claims may not necessarily be so. As noted by the Economist, it takes a lot of marketing money to sustain this image. The magazine notes that Red Bull's founder, Dietrich Mateschitz (an Austrian) "spent three years developing the drink's image, its packaging and its low-key, grassroots marketing strategy." Further, Red Bull puts about 35 percent of its revenues back into advertising—about $19 million according to Advertising Age. And advertising is not the only IMC component the company successfully employs. At launch in Europe, students were persuaded to drive around in Volkswagen Beetles or Minis with a Red Bull can strapped on the top and to conduct Red Bull parties using wild and unusual themes. A marketing director from Procter & Gamble was hired to oversee strategic planning for the brand in North America (he later was named one of Brandweek's Marketers of the Year).

At present, Red Bull's marketing efforts still employ grassroots efforts but have expanded to include more traditional media as well. What seems to make Red Bull successful, however, is that the efforts assume a very nontraditional approach to its messages—essentially attempting to do the opposite of what everyone else does. The first order of business in any market is to determine four or five accounts in a particular market area that sustain the image—underage discos, surf shops, and so on—rather than attempting to gain widespread distribution. Spokespeople (deejays, alternative sports stars, etc.) are recruited to spread the word and to be seen using the product. Sponsorship of alternative sports like the Red Bull Streets of San Francisco (a street luge event) and Red Bull Rampage (a free-ride mountain bike competition) has also been shown to be effective, as has the use of "education teams"—hip locals who drive around in a Red Bull auto handing out samples and promoting the brand.

The more mainstream media are also used— though on a market-by-market basis rather than through mass media. And even these traditional efforts may take on a less traditional form. For example, the advertising campaign ("Red Bull gives you wings") uses animated television and radio spots featuring the devil trying the product and sprouting wings. The company also sponsors a number of more traditional events ranging from soapbox derbies to Formula 1 racing cars, as well as extensive public relations programs to reach youth.

Now that Mateschitz and Red Bull have created a new beverage category, can they hold on to it? Success attracts competitors—many who have the potential to provide more marketing clout than Red Bull. Coca-Cola, Pepsi, and Anheuser Busch have all recently introduced their own energy drinks. Hansen Beverage's "Energy" and Sobe have both been gaining sales, and Snapple's "Venom" is getting more marketing support from Cadbury. Mateschitz is not oblivious to the competition. He and his marketing team are continually developing more wacky ideas to maintain Red Bull's alternative and mystical image. Others feel that expanding the category can only benefit Red Bull. It may depend on how large the cult grows!

Sources: "Selling Energy," Economist, May 11, 2002, p. 62; Kenneth Hein, "Red Bull Charging Ahead," Brandweek, Oct. 15, 2001, pp. 38-42; Hillary Chula, "Grabbing Bull by Tail," Advertising Age, June 11, 2001, pp. 4-6; David Noonan, "Red Bull's Good Buzz," Newsweek, May 14, 2001, p. 39.

The Red Bull introduction to this chapter demonstrates how products and/or brands become successful due to their adoption by certain segments of society. In this instance, a whole new category of drinks has developed as a result of consumer needs. What is important for marketers to know is how and why these needs develop, what they are, and who is likely to use the product or service. Specifically, marketers will study consumer behaviors in an attempt to understand the many factors that lead to and impact purchase decisions. Those who develop advertising and other promotional strategies begin by identifying relevant markets and then analyzing the relationship between target consumers and the product/service or brand. Often, in an attempt to gain insights, marketers will employ techniques borrowed from other disciplines. Research methods used in psychology, anthropology, and sociology are becoming more popular in businesses as managers attempt to explore consumers' purchasing motives. The motives for purchasing, attitudes, and lifestyles need to be understood before effective marketing strategies can be formulated.

These are just a few of the aspects of consumer behavior that promotional planners must consider in developing integrated marketing communications programs. As you will see, consumer choice is influenced by a variety of factors.

It is beyond the scope of this text to examine consumer behavior in depth. However, promotional planners need a basic understanding of consumer decision making, factors that influence it, and how this knowledge can be used in developing promo-104 tional strategies and programs. We begin with an overview of consumer behavior.

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Advertising With Circulars

Advertising With Circulars

Co-op Mailing means that two or more businesses share in the cost and distribution of a direct mail campaign. It's kind of like having you and another non-competing business split the cost of printing, assembling and mailing an advertising flyer to a shared same market base.

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