Consumer Behaviour †Product Line Extension Essay

Created by two avid surfers, Billabong is a brand designed by surfers, for surfers. In 1973, Billabong offered little more than a small range of surf wear: mainly surfboards and board shorts. But today, Billabong is a brand that encompasses the Australian surf culture by offering products that cater not only for the surfer inside many of us, but for fashion and lifestyle needs. 1.2 CURRENT TARGET MARKET Billabong is a brand that offers numerous products designed to accommodate numerous lifestyles. Included in their extensive range are products designed for surfers, general beach goers, skateboarders and the fashion conscious. Comprehensive characteristics of this market are difficult to pinpoint, however, it is the assumption that the majority of consumers are males and females aged between 12 and 35 years of age. Consumer Need: Social Image Need – the most important need satisfied by Billabong 1.3 CURRENTLY SOLD In the mid 1980’s, just over ten years since the birth of Billabong, the successes of the small Australian brand were being recognised world wide and Billabong products were in high demand. This led to the export of Billabong products to the global market with countries such as the USA, Japan, New Zealand and Europe first in line. Today, the product range available extends as far as 2200 lines in Australia, 1300 lines in the US and many more in over 60 other countries. It is not unusual that the greatest distribution of Billabong products is to coastal destinations. However, countries locked by land are given the opportunity to live the Billabong experience with products available on-line and in assorted stores around the world. 1.4 PRICE RANGE Billabong products appear at the higher end of the price spectrum for the overall market, and are moderately to high priced as compared to their surf brand competitors. Some examples of how Billabong measure in the market are illustrated below: Girls Thongs: Billabong – $17.95 Mermaid Sister – $19.95 Target $4.00 Men’s Jeans: Billabong – $120.00 Quiksilver $139.95 Jeanswest $65.00 Beach Towel: Billabong – $69.95 Aztec Rose – $39.95 Bonds $29.95 1.5 MAJOR ENVIRONMENTAL VARIABLE The single most important environmental variable affecting Billabong is ‘Culture’; defined as † a set of values, ideas, artefacts and other meaningful symbols that help individuals communicate, interpret and evaluate as members of society† (Blackwell et al. 2001). Products are largely designed, as outlined in section 1.2 and Appendix A, for a surf/sun/style culture which is seemingly ubiquitous in Australian living. 1.6 PRODUCT EXTENSION Billabong Skinwear: a Skin-care range including sunscreen, lip-balm and after sun-gel. This range meets the highest Australian standards in sun protection whilst also providing the essential style that Australians have come to know and expect from Billabong products. 2.0 SECTION B The target audience for any given product or service is the group of people that advertisers wish to attract through their marketing activities. The process of identifying and defining an audience leads to assessing priorities. For instance, a firm may identify a sizably large group or market to be potential consumers. However, it is likely to be financially unsound to attempt to target all consumers within the group. A target audience may be established by asking questions such as: Which audience is large enough to be a significant target? Which audience is a priority in terms of the brand’s product? Which audience is the target of the product’s attributes and benefits? A target audience may be defined by their age, gender, family status, lifestyle, interests or a combination of these characteristics. It is noteworthy that a target audience invariably differs from the overall target market and is generally only a segment of a given market. For example, Billabong would target consumers (both male and female) between the ages of around 12 – 35; but different segments of this broad market are more likely to purchase than others. It is desirable to develop demographic and psychographic profiles of these likely consumers (the target audience). Accurate details of a target audience can only be obtained by means of credible market research practices. However, inferences and assumptions can be made beforehand to aid any research. Some of the demographic characteristics of the Billabong target audience are, as mentioned previously, males and females between the ages of around 12 – 35 (although  advertising is usually specific to one particular gender as seen in the example of Appendix A). Such individuals are predominantly situated in coastal regions where the beach/surf/sun culture thrives (as clearly demonstrated in Appendix A), although there are significant deviations from this trend especially in recent times with such a broad, climate and geographically unbiased product range spanning some 2200 lines in Australia alone (Billabong International 2004). Economic factors can sometimes play a role in defining a target but in this case the audience is not necessarily limited to any specific economic traits; for example, income brackets are not easily defined for consumers as Billabong International offers such a variety of products satisfying both functional lifestyle needs and fashion influenced desires, hence the user’s likelihood of purchasing is expected to be more dependant on the psychographic factors of consumer motivation, motivational intensity and consumer knowledge. Consumer motivation represents the drive to meet physiological and psychological needs via purchase and consumption of products (Blackwell et al. 2001, p.233). Billabong customers are likely to be driven to satisfy their social image needs and needs for pleasure. They are expected to have a high motivational intensity to fulfil these needs so as to willingly overcome the price barrier associated with doing so. The target consumers for Billabong have a relatively high level of consumer knowledge regarding their chosen product. The concept of consumer knowledge involves individuals pre-existing knowledge and perceptions related to product purchase and consumption. These consumers have a high awareness of the products attributes and associations, such as the famous waves symbol, the obvious ties with surfing and pro surfing and the companies Australian origins. They have a familiarity with the products image within the marketplace. They associate the brand with high quality, high fashion and are prepared to bear the comparatively high price. This target audience is aided by the purchase knowledge they hold regarding Billabong’s price positioning; that is, the company is in the high price range compared to the overall market but is moderate to high in price when evaluating surf brands (see Section 1.4). These consumers are also equipped with knowledge on when  and where to buy – aware that the products are available in specialty surf-specific stores and can rely on a least two sales each year at the end of summer and winter. Although expensive research is often the most accurate way of developing a targeted marketing approach, it is always beneficial to attempt to identify expected consumers as early as possible in a marketing plan. Whether you utilize extensive demographic and psychographic research or just use common-sense, â€Å"the key is to identify a group or groups of potential customers that offer the best opportunities for business potential† (Defining Your Target 2004). 3.0 SECTION C 3.1 THE BILLABONG COMMUNICATION MIX A successful communication mix is essential in the marketing of any brand or product to consumers. This ties in with the familiar four P’s of marketing which are price, place, promotion and product. The most important factor relating to the concept of the communications mix is promotion. Examples of promotion include: personal selling, sales promotion, public relations, publicity, direct mail, advertising, sponsorship, branding and distribution of samples. A good communication mix ensures that the brand receives adequate exposure whilst also targeting the appropriate audiences (see Section B). For many large corporations, their logo is an integral part of their marketing activities. This unique identifier will be present throughout all forms of visual marketing communication and is a powerful statement in itself. An obvious example of such would be Nike with its ‘swoosh’ symbol. Similarly, the famous Billabong ‘waves’ are present throughout the Billabong communication mix. 3.2 PRINT ADVERTISING Currently there are a number of communication methods that are used by Billabong. Products are featured in a number of magazines such as Dolly,  Girlfriend, Chik and Cosmopolitan, who predominately market to the female segment of Billabong’s target audience. Print advertisements also feature in more male oriented publications such as Ralph and FHM and can be seen in specific surfing magazines such as Surfing. The combination of these promotional activities effectively reaches the specific audience that Billabong targets. 3.3 BROADCAST ADVERTISING Broadcast advertising is very limited and is likely to only be featured for events such as special surfing related events such as the Billabong Pro surf championships. 3.4 INTERNET PROMOTIONS Internet promotions are one of the most extensive ways in which Billabong advertises. On almost every Billabong advertisement featured in the aforementioned media, the Billabong web address is present; ‘billabong.com’. The website shows the entire product list, which are available for purchase online. The website is not just limited to the Australian audience. It also caters for different products and prices suitable for different regions around the world, including: North America, South America, Asia and Europe – representative of Billabongs growing international presence and successful utilisation of the internet in market places around the world. 3.5 PROMOTIONAL MATERIAL Associated to Billabong is a highly influential reference group who effectively act as a promotional tool. These are pro surfers such as Layne Beachley, Alana Brennan and Andy Irons. This reference group gains credibility for the brand by using Billabong products. Billabong promotions use these public faces to give testimonials as the attention gained by having expert’s approval is invaluable in the fight for consumer preference. 3.6 POINT OF PURCHASE DISPLAYS Point of purchase displays are frequently used by Billabong. In surf shops such as City Beach Surf (Garden City, Whitfords City), Billabong products are grouped together in the store whereas in Brothers Nielsen (Garden City, Perth, Whitfords City), the Billabong are grouped alongside competing brands by category. From the marketing perspective of a reputable manufacturer, it is more desirable to have the clothes grouped by brand rather than by category as this allows consumers to search for the specific brand they wish to purchase. 3.7 IS THIS COMMUNICATION MIX APPROPRIATE? Print advertising utilised by Billabong is appropriate and effective as the magazines that they feature in are targeting similar or overlapping audiences. Promotions and promotional material aid in increasing public familiarity with the brand. This has been achieved by attaching the Billabong name and logo with events such as the Billabong Pro and other surfing events worldwide. Celebrities, especially movie stars, television actors, entertainers, and sports figures, can be very powerful assets to any marketing and advertising campaign (Blackwell et al. 2001). Billabong uses famous surfers Layne Beachley, Alana Brennan and Andy Irons to achieve higher credibility within the surfing world. Another powerful promotional tool is the brands website. Generation â€Å"X† and â€Å"Y† are very likely to search the internet for products that they wish to purchase, as it allows them to shop in the comfort of their homes without the effort of searching different stores to find certain products or information. Internet Promotions are seen to be effective because of the increasing frequency and effectiveness of e-commerce in today’s globalised market place. The website is easy to use, easy to find and is prevalent in all the advertising material; increasing consumer knowledge of the website. Broadcast advertising for Billabong is likely to have a limited effectiveness. It has been shown that only 19% of television viewers actually watch the advertisements shown during a show (Lach, cited in  Blackwell 2001, p. 438). Bearing this in mind, and realising that the target audience is a relatively specific one, it is doubtful that the audience will be reached on a frequent basis via this medium. 3.8 CHANGES TO COMMUNICATION MIX We believe that Billabong should implement a number of various changes to the current communications mix in order to launch the Skinwear range. Procedures such as distributing free samples would be effective in increasing: awareness of the product, its function of reducing the effects of sun exposure and the positive associations of the brand. An increase in Billabong sponsored events will lead to increased exposure of the Billabong name and will provide an excellent opportunity to introduce consumers to the product extension line. The Skinwear range can be officially launched by specifically attaching the name of the new product (Skinwear) to a Billabong sponsored event. On its launch, the previously mentioned method of sample distribution can be used to full effect. The launch of Skinwear will coincide with the increased marketing activities surrounding the entire Billabong range during the summer holiday season. An effective way of maximising the benefits of this situation would be to utilise POP displays, perhaps combined with promotional gift packs. 4.0 SECTION D 4.1 PRODUCT CONCEPT As a well recognised and trusted surf brand, Billabong is endeavouring to branch out into the skin-care market, in particular: sun-care to further cater to its customers lifestyle needs. Like the rest of the world, Australia as a society has become heavily health and image conscious; as demonstrated from the many articles, advertisements, new products and spending increases based in the Health and Cosmetic Industries. Billabong has made the decision to extend their existing product range in an attempt  to take advantage of this new demand for health and beauty products. In doing so, Billabong has created its ‘Skinwear’ range which includes a Sunscreen, Lip balm and After-Sun Gel all of which meet the high standards set by the Australian Government and Australian Cancer Council. Included in the Billabong Skinwear range is a Sunscreen boasting an SPF or Sun Protection Factor of 30, shielding the skin from harmful UV rays 30 times longer than our skins natural defences are able to. Through the introduction of past innovative products, Billabong has become known for its dedication to meet and exceed the needs demanded by their surfing clientele; hence incorporating an 8 hour water protection attribute into this product. This feature allows surfers and beach goers the chance to enjoy their lifestyle without the concerns of having to frequently reapply sunscreen. The combination of 30 SPF and 8hrs of water resistance will instantly place the product at least equally, in terms of functional attributes, at the top of the market. Billabongs new Skinwear range also includes a Lipbalm featuring an SPF of 15. As a means to widen the target audience, Billabong’s new Lipbalm is free of colour and taste, removing added hesitation in the male demographic. For easy application, the Lipbalm is packaged in a squeezable tube, making for easy and mess-free application; all of which is very handy when applying at the beach. Incorporated into the After-Sun Gel is an aloe extract. According to Steve Herman (2004, p.54) â€Å"aloe remains a genuinely useful healing agent widely accepted by the public†. In order to meet consumer requirements, aloe is a feature in the After-Sun Gel product. It is merely a last resort that consumers would ultimately require a product to soothe the effects the sunburn; however, as Plato quite accurately stated â€Å"The most we can teach people is what they already know†. This statement defines the need for a product such as After-Sun Gel, as it is expected that even with the existence of a Sunscreen as provided by Billabong; consumers are likely to use the product ineffectively every now and then. Pat Thomas (2004, p.16) declares â€Å"the sun is now officially the enemy – against which sun creams are our weapon of choice†. According to figures given on the Australian Cancer website (http://www.cancer.org.au) 374,000 Australian’s are treated for non-melanoma skin cancer every year. This figure accounts for 1.9% of Australia’s entire population. More alarming is that an additional 8,500 Australians are diagnosed with a melanoma, of which 1300 will die as a result. Such frightening statistics generate the question; are members of Australia’s beach and surf culture taking appropriate steps to protect their skin from such devastating consequences? Pioneers in serving this beach/surf culture, Billabong attempt to make their consumers aware of the harmful dangers associated with long term exposure to the sun and its effects. In doing so, Billabong offers such products as available in their new Skinwear range to protect the physiological needs of their consumers as well as removing the quite apparent social negativity involved in wearing and applying sunscreen. 4.2 TARGET MARKET REVISITED It would be unwise for a brand such as Billabong to extend an already successful product range if there was any reason to believe that it would not be as successful as the collective existing products. In accordance, Billabong has created a Skinwear range that not only extends the well recognised image of the brand but also the values and attributes that a consumer would associate with any of its other products. For instance, Billabong is renowned for its high quality surf-related products, innovative style and up-to-date fashion. A marketing approach to increase the popularity of Billabong products is to promote consumption as more than an experience, but rather a statement of image and self-expression. It is for this reason that the slogan for the new Skinwear range reads: â€Å"Wear Billabong, even when you’re naked†. As identified in Section B, Billabong’s key target audience extends between males and females aged between 12 and 35. At these ages, it would not be inaccurate to suggest that a major factor in the purchase and consumption of  surf brands and their related products is whether the product links consumers with the desire to fit certain image and style demands. The surf and beach culture is dominant in the lifestyles and images of Australian people. This, in effect, further intensifies the need for many consumers to conform. Australians are becoming more obsessed with their health and appearance. Appearing on Australian networks week by week are television shows that promote cosmetic surgery, crash diets, new health risks, advanced pharmaceuticals and much more. It is not surprising that consumers in the demographic of 12-35 years of age are identifying a need to improve and maintain beauty and health. The links between sun exposure and skin damage have been extensively researched in Australia, as it appears that compared to other geographical locations, Australian people are more susceptible and at risk of suffering, due to the consequences of living in such a sun exposed location. When taking into consideration the various issues relating to sun exposure and skin damage, Billabong decided to create their Skinwear range. It is expected that with an informative and effective marketing campaign, existing Billabong consumers will see the need to execute a diligent skin protection regime, in turn utilising the products that are now offered by Billabong. 4.3 ATTITUDES In order for this product extension to be successful, Billabong has attempted to seize the large target audience that already purchases and consumes their existing product range. It is suggested by Blackwell et al. (2001, p. 289) that â€Å"holding a favourable attitude toward a product is almost always an essential prerequisite in order for consumers to hold a favourable purchase of consumption intention†. In saying this, it is not expected that the consumer will automatically purchase the product, but that they will hold a favourable intention which may assist in their decision. Several models are used to aid marketers of company’s such as Billabong to analyse consumer attitudes and their associated effects on product evaluation and choice.  Better known as the Fishbien Model and Ideal-Point Model, marketers of brands such as Billabong are given important information from consumer’s responses. In many cases, this leads to new product developments as is the case of Billabong, where certain needs not catered for are alerted to designers. In order for Billabong to avoid consumer’ attitudes becoming impartial between brands, it is essential to do whatever it takes to achieve â€Å"Attitude persistence†¦ [where] an attitude’s immune to such corrosion† (Blackwell et al. p. 300). It is likely that the need for products such as that offered in Billabongs Skinwear range will never be made redundant, purely because the risks associated with having lives revolved around the sun are not diminishing in number and neither are the risks associated. The greatest obstacle faced when introducing Billabongs new Skinwear range is changing consumer’s preferences, in effect, â€Å"recruiting competitor’s customers† (Blackwell et al. 2001, p. 301). A strong feature of the Skinwear range is its SPF rating and Water Resistance. In order to â€Å"recruit competitor’s customers† Billabong must be effective in changing consumers attitudes, drawing on favourable attitudes held about their existing product range, as well as emphasising comparisons between their new product extension and other existing brands – hopefully in favour of their products. 4.4 CONCLUSION Billabong recognises the importance of consumers needs to ‘be protected in the sun’. After all, it is the expectation that having consumers who exude a lifestyle surrounded by surf and beach that these needs will as some point require satisfying. As a highly regarded surf brand, Billabong places importance on fulfilling consumer’s needs for safety and health. In recognising the gap in its product range, Billabongs new product extension, boasting a highly protective Sunscreen, Lipbalm and After-Sun Gel, continues their commitment to meet the demands of its consumers for the coming summer season. 5.0 SECTION E To examine the decision making processes experienced by a consumer it is practical to use the Consumer Decision Process (CDP) Model which defines seven likely stages involved in any purchase. The CDP model â€Å"†¦represents a roadmap of consumers’ minds that marketers and managers can use to help guide product mix, communication and sales strategies† (Blackwell et al. 2001, p.71). All consumers are not strictly bound by this model in making their decisions, but are likely to undergo at least some of the following stages: The Consumer Decision Process Model In the case of Billabong, to ensure the success of their product line extension and the associated marketing activities; it would be beneficial to hypothesise the probable processes of their target audience in becoming loyal users of the new product. Such predictions may be made by examining the stages of the CDP model. The first stage of the model, need recognition, involves the consumer sensing the difference between their ideal and actual state of affairs. Billabong will aim, through straight-forward advertising and other marketing communications (as outlined in Section C), to undermine the user’s perceptions about the adequacy of their existing state and will hence create a problem that must be solved. Advertising will include the contrasting negative consequences of not using the product (such as skin damage and/or cancer) with the altogether positives outcomes associated with using the new product. Such benefits include a high level of skin care and also positive social image. With so many choices and more and more variables affecting consumer decisions, especially for low-involvement products such as sunscreen, it is expected that previous loyal followers of the Billabong trademark will factor their positive experiences and high levels of satisfaction into their decision to use Billabong Skinwear. The second stage involves searching the marketplace for information on  products and alternatives. The loyal Billabong consumer will find themselves undergoing components of both an internal and external search and will then move on to assess evaluative criteria as outlined by the third stage; pre-purchase evaluation. It is in this stage that these particular consumers are likely to conclude Billabong as the better alternative. The target audience, whether undergoing an external or internal search will find Billabong to be at least equal (see Section 4.1) to its competitors in terms of its products attributes whilst the positive associations with the Billabong brand will ensure that Billabong Skinwear is seen as the superior alternative. It is the intention of Billabong to extend its dominance into the new market and it is hoped that consumers eliminate the need for extensive searching in order to simply transfer loyalty into this new market. There are two paths that will lead a consumer to the fourth stage of the purchase decision. They may either systematically travel through the previous three stages leading to an obvious choice to purchase, or they may avoid the first three stages altogether and simply purchase the product based on an instantaneous decision influenced by prior ties to the Billabong brand. An example of such may be seen in impulse purchasing, where point-of-purchase (POP) displays may play a significant role. The fifth stage; consumption, is likely to occur seasonally as sun protection is demanded mainly in summer. However, loyal consumers such as those outlined in section B are perhaps the more likely of any one in the market to use the product as suggested by Billabong and its experts – all year round. Stages five and six; consumption and post-consumption evaluations are likely to have a positive, satisfied response from consumers when taking into consideration Billabongs efforts to transfer loyalty from past experiences into the new products evaluation. The last stage, divestment, holds no definitive expectations from those marketing the new product. The only aim is for the target consumers to consume the product completely and not discard it in preference for a competing brand before the end of its useful life The transition of loyal users to the new product (as summarized in this section) demonstrates how varying influential factors will alter the processes outlined in the Consumer Decision Process (CDP) Model. Whether it be the testimony of industry experts or the word of mouth (WOM) distribution of the positive brand image, it is clear that it will be more than possible to transmit the loyalty of the brand into the new product extension line. 6.0 REFERENCES Billabong International 2004. Retrieved: September 30, 2004, from http://www.theage.com.au/articles/2004/ 06/12/1086749947661.html?from=storylhs. Blackwell, D.R., Miniard, P.W. & Engel, J.F. 2001, Consumer Behaviour 9ED, Harcourt Inc., Florida. Defining Your Target 2004. Retrieved: October 4, 2004, from http://www.usg.com/contractors/defining_your_target.asp. Herman, S. 2004, ‘A day at the beach’, Global Cosmetic Industry, vol. 172, no. 8, pp. 53-54. Retrieved: October 13, 2004, from Proquest. Thomas, P. 2004, ‘Behind the Label: Suncream’, The Ecologist, vol. 34, no.6, Retrieved: October 13, 2004, from Proquest.