Consumer Behaviour

Since its inception in 1837, Tiffany has been renowned for its rare luxury goods, especially its magnificent diamond jewellery and its diamond engagement rings. Tiffany and Co. markets itself as an arbitrator of sophistication and elegance. (The Tiffany Story, Tiffany and Co. 2012) New product – iPhone case Tiffany has always met its customers’ needs and wants; even above and beyond expectations. It prides itself on “innovation, creativity and brand recognition”. (Tiffany and Co. 012)

Due to the ever increasing popularity and success of the Apple iPhone, it is target marketing a younger, more affluent Generation X and subsequently offering its customers an exclusive and prestigious iPhone cover – fully encrusted with its magnificent diamond jewels. This top of the range and unique phone cover is aimed and position to also satisfy its high-end clientele and upper-class elite market. Through market segmentation and consumer behaviour, this phone cover will embrace sophistication and value that is instilled in each and every Tiffany product and its brand.

Target Market Tiffany’s iPhone cover will appeal to the high-end spectrum and social class of society which is predominately the prosperous and affluent; however it is priced reasonably so that it is affordable to the average female. The majority of its target customers will range from 16 and 35, with iPhones who are socially-savvy and like to be perceived as classy and elegant. Most of its consumers will be living in the affluent inner-city suburbs and earn above average medium income. According to Maslow’s Hierarchy of needs, this evel of physiological needs is concerned with the ego which may include the need for self-acceptance, self-esteem, success and independence. Externally, this directed ego needs include the want for prestige, reputation, status and recognition from others. This presumed desire to “show off” one’s achievements, success or simply this iPhone cover accessory is highlighted by the need for this exclusive phone cover.

Hence, the motivation for this accessory is to satisfy a need for status, or more specifically the need to feel empowered, classy and prestige. the iPhone has become a culture surrounding young people’s adoption and consumption. The iPhone has become a symbol of high class and social status in young people’s lifestyles. In addition, Abrahamson and Rosen kopf (cited in Delre, Jager & Janssen 2007) conducted a study regarding sociocultural factor related to consumer behaviour.

The results found that innovation focused on calculated models that look into the patterns of innovation through social networks. The result revealed that young people are easier to be influenced by sociocultural factors. Furthermore, Berg, MA (2011) conducted a research about the behaviours of teenagers, and the use of information and communication technologies outside school. Research found that teenagers tend to use social media network such as Facebook and MySpace, more then other social activities.

Moreover, teenagers have the lack of satisfaction regarding their online life and the importance given to the anonymous online-communication predicts a higher disclosure on the Internet. The promotional strategy of some companies could be change, due to the changes of sociocultural of teenagers. Ansari, Koenigsberg and Stahl (2011, p713-728) also indicates the rapid growth of online social networks has brought many changes of promotion in the marketing field in studying the structure and function of social networks.

Attitudes (Facilitators) A major issue facing consumers is the effect of attitudes from a group of people. Smith, De Vries, Tan and Prislin (cited in Timmor &Katz-Navon 2008, p. 250) claims that in this market each person belongs either to a group of people that has adopted the new products/services, or to a group of individuals that has not adopted it. In other words, an individual belongs to a group of people is called “ingroup,” while the others belongs to other subgroup is called “outgroup. The size of each group always changes as individuals move from one subgroup to other subgroup. Asch, Deutsch, Gerard, Kruglanski, Webster, Bond and Smith (cited in Timmor &Katz-Navon 2008, p. 250) indicated that most subgroups always influence the attitudes and behaviours of each other through group norms, social pressure and minority dissent. When exposed to most of the influence, some people are likely to experience substantial conformance pressure that causes it to focus on the majority position. This induces compliance behaviour.

Moreover, Parascandola, Hurd and Augustson conducted a survey which collected information on a huge range of consumer attitudes related to technology, style, and trends. To address the differences in basic descriptive information on product use, the research assessed the level of awareness and use for several brands, they analysed interest in relation to basic demographic variables, such as smoking status, gender, and health status, and in relation to consumer attitudes related to technology and product experimentation.

The research found that most people are more likely to rely on their own feeling, then their cognitive and conative factor. Two negative consumer issues: Belief (Barriers) Snyder (1974) indicated that consumers with a low need for distinctiveness and a low need for assimilation were just as likely to adopt the product even as the perceived group size increased. The term self-monitoring refers to the extent to which individuals regulate their behaviours based on external events such as the reactions of other people or based on internal factors such as their own beliefs.

Consumers with a low need for distinctiveness and a low need for assimilation may be low self-monitors are indifferent to the external influence of others. Another factor facing consumers is belief about ethnocentrism. Durvasula, and Lichtenstein (1991) examined the impact of Consumer Ethnocentrism (CE) on “beliefs” about products from different countries. Nielsen and Spence (cited in Durvasula, and Lichtenstein 1991) provide an exception, but their study only assessed the impact of CE on the ownership of cars. In summary, relatively little is known about the impact of ethnocentrism on purchase behaviour.

For the intention of this research, and similar to Shimp and Sharma (1987, p. 280), Shoham and Maja (2003) define consumer ethnocentrism as “a belief held by consumers about the appropriateness, indeed morality, of purchasing foreign-made products. ” Tiffany & Co. , as an American brand in Australia, could lead to cultural misinterpretation. They may think Australian brand it better than others. Consequently, when we develop a new problem we also have to consider the lack of knowledge from consumers will also cause them a negative belief.

Decision Making (Barriers) According to Truong’s academic journal: “Personal aspirations and the consumption of luxury goods”, it purports that with closely competitive markets, pricing for the iPhone cover in this luxury market and such that the wealth tend to consume goods in order to parade their “wealth and gain social status. ” However, the ‘Veblen Effect’ came to pronounce that the willingness to pay a price for functionally equivalent product is perceived to be more prestigious (Bagwell. &. Bernheim. 996)  This inclination to pay more may serve to generate considerably more status for the users than any direct utility (Mason 2001) and subsequently a “price premium may paradoxically have negative effects on consumer’s decision-making processes” This is further enforced by Numair, AS, Malik, F, Waqas, Q, Navaveed, A 2011, which declares that “Consumers are comfortable with high price of luxury goods as long as it fulfils the desire of building social status as a justification against those who cannot pay for these products (Mason, 1981).

Therefore, if the luxurious product cannot fulfil the desire to gain social status, it becomes a decision making barrier for the consumer. 3. Consumer Response to these Issues In this section, I am going to interview 4 people from our target market proposed ed in part 1 in order to obtain their reaction and opinion to the consumer issues I have identified in part 2. The profiles of the interviewees are below, and the actual transcript in the interview will be shown (See Appendix A – transcript of the interview) Profile of interviewing respondents I have interviewed 4 interviewees, who are our target market regarding my consumer issues.

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