BRIEF REPORT

Subject Consumer market analysis is a study for consumer behavior, which is part of situational analysis for the marketing plan. By conducting market analysis, the marketers can identify factors motivating the consumers to buy certain product brand; or vice versa, the consumers do not intend to buy other brands. Consumer behavior is referred to the consumer buying decision process, which includes the customers characteristics (influence the buying behavior), or the psychological processes (influence consumers response to the marketing program), and finalization of purchase decision for product of choice. Research paper abstract To explore the consumer market / behavior and its effects on marketing plan, we apply a research paper with topic Malaysian grocery shoppers behavioral response to stock-outs. The paper was prepared by Mario J Miranda, and K Jegasothy, School of Applied Economics, Victoria University, Melbourne, Australia in April 2007 April 2008. The study revealed differences between Malaysian and Australian consumers in responding for the grocery products when out of stock. The purchase decision dealing with product stock not available was influenced by consumer characteristics and psychology. Purpose To study the consumers purchase decision in responding for stock-out of grocery product in the developing country (Malaysia) and developed country (Australia). Identification of the consumer characteristics and consumer psychology effects on the buying process in different target markets provide information for the marketers, who produce logistical plan, inventory management and capital budgeting.

Introduction Globalization has increased competitiveness in market places and challenged the marketers to optimize the limited resources for profit maximization. Hence, the marketers of global brand study the consumer behavior in order to produce an effective marketing plan for target markets in developed and developing countries, which are vary in culture and environment. Specifically for Malaysian grocery market, which are common and routine expenditures, there are still a lot of international brands fill in the shopping racks and create brand loyalty. If the inventory cannot be replenished in time due to poor planning, the consumers will make alternative solution or even buy from competitors. As such, the marketers must implement customer retention and satisfaction strategies aggressively for long-term business.

Research approach The shoppers were selected randomly and interviewed to collect their behavioral responses when their preferred brand milk/ milk products (dairy products) are not available or stockout. The similar method for data collection was used in Kuala Lumpur, Malaysia and

Australia market. The Malaysian market is chosen for few reasons: Urbanization creates wealth in the cities and the consumers have stronger spending power; the westernized society is health and wellness cautious. These factors affect the purchase decision. Apart from price, the

shoppers tend to look for consumption time of product, freshness, packaging, support service toward customer satisfaction. Milk/ milk products are selected as the product must be consumed within short period. The nature of perishable goods creates regular purchases.

Findings 1. Malaysian shoppers used the shopper lists as instrument to manage their purchases/ spending; whereas Australian shoppers tended to adjust their budget for alternative products within the store. 2. Malaysian shoppers were frugal and observant due to smaller household size; ability to shift for alternative product was low. 3. When the dairy product was stock-out, the consumers made decision to buy variants of preferred brand. Comparing with Australian, the Malaysian shoppers had fewer tendencies. 4. Propensity for other three (3) decisions - buying product with other brand names, buying from other shops or postponing/ foregoing purchases, were equal but far less effect than variants of preferred brand; however, Malaysian shoppers were more flexible than Australian shoppers. 5. Australian tended to shop the variants product within the store with lower price and higher volume. Limitation Malaysian shoppers were more sensitive for shelf life of perishable dairy products. This behavioral response should be considered in inventory management for the stores. Malaysian shoppers spent within monetary budget and had limited storage space causing less flexible in making purchase decision. They prioritized immediate need than keeping storage.

Discussions The researcher estimated the consumer orientation when responding for stock-out of preferred milk/ milk products situation in four (4) behavior typologies as below. o Buying variants of preferred brand circumspect shopper

When facing stock-out circumstance, both Malaysian and Australian shoppers tended to look for variants of preferred brand. However, the Malaysian shoppers used shopping list as direction and prioritized the expiry date of products. They would not purchase the product with short consumption time. They would rather postpone the purchase. Household size affects the purchase decision of variants. Instead, the Malaysian shoppers will choose alternative brand with similar or bigger packing size rather than variants with smaller packing size. o Adopt another brand the frugal shopper

In case of stock-out, they were price-special and prepared to trade-off quality assurance with lower price. The frugal shoppers looked for lowest price and tended to buy big volume. Generally, the deal prone is applied for big size households who consume large volume and cause obvious effect on expenditures. Brand loyalty is lower when the size of household is increased. However, Malaysian shoppers have lower tendency to buy more volume due to space constraint. Similar to Australian shoppers with small size households, they are less

deal prone in responding to stock-out option. The probability of buying another brand is increased when the size of households is larger. o Forgo/ postponing purchase the observant shopper

Dealing with stock-out of dairy product, either Malaysian or Australian shoppers emphasized the consumption date in addition to price-special (as frugal shopper). However, the

Malaysian shoppers were less keen to trade-off quality with lower price due to minor effect on small size household expenditures. In case of stock-out, the consumers can forgo or postponing the purchase. They can be easily motivated to look for other brands. High effort of marketing is needed to capture the market. o Buying from another store the opportunistic shopper

Malaysians shoppers used shopping list as guidance to make buying decision and control the budget. Concerning the preferred brand or alternative products might not be available in other stores, they rather shop for variants of preferred brand, alternative brand or forgo/ postpone the purchase. The opportunistic shoppers do not pay attention on use-by date. Their purchase decisions are not restricted by use-by date, price, brand name or household size.

Conclusion The shopping list is governance for Malaysian shoppers to make decision of purchase. It is written shopping serves as aid memoir, instrument that gives shoppers framework to adjust their budget and seek alternatives as discussed above. It provides the Malaysian shoppers cautiousness in buying process. In short, the Malaysian shoppers tend to buy variants of preferred brand or alternative brand, not to forgo/ postpone purchase and not to venture in other store. Reading sources Kotler, P. & Keller, KL (2006). Marketing Management (13th edition). Prentice Hall: New Jersey Austrade (2007), Processed food to Malaysia: trends and opportunities, available at: www.austrade.gov.au/default.aspx (accessed 12 September 2007). Corsten, D. and Gruen, T. (2004), Stock-outs cause walkouts, Harvard Business Review, Vol. 82 No. 5, pp. 26-8. Darden,W.R. and Reynolds, F.D. (1971), Shopping orientations and product usage rates, Journal of Marketing Research, Vol. 8 No. 4, pp. 505-08. Lars Perner, Ph.D. Assistant Professor of Clinical Marketing (accessed 2012) University of Southern California, Consumer behavior The psychology of marketing, available at: http://www.ConsumerPsychologist.com https://docs.google.com/viewer?a=v&q=cache:nRZjHC637PcJ:business.fullerton.edu