The decision making process for Billabong Essay Example

their family’s values and attitudes. Finally we have considered how Billabong manages to influence culture and innovation. Segmentation The Billabong brand originated in Australia which is big in size but with a relatively small population within densely populated cities. The company soon realized to increase revenues and profit they had to expand abroad.

They needed time to secure position in the home market, to acquire knowledge and experience in the production of surfing equipment. Faced with this situation, Billabong used their available resources and expanded from their home market into much more sizeable markets, with good infrastructure, dense populations and relatively stable economies, all which are the criteria for effective targeting. “Billabong began exporting products to Japan and the United States, particularly Hawaii, in 1979, and the company decided to license its name and product designs in the early 1980s.

The brand is now available in many countries in Asia, and across Europe – from Russia and Finland in the north to Greece in the south, but around 50 per cent of our total sales still come from the Americas” said Mr. O’Neill, the general manager of Billabong international. After establishing themselves in the world’s biggest market, America, they managed in successive years to follow the same logic and expand into territories where surfing is considered as one of the main beach activities such as New Zealand, South Africa, Europe and the Pacific Island region.

When it comes to the wetsuit market, as with many other markets, there are unknowns which need to be answered, such as, who are surfing, where are they surfing and why are they buying that particular product?

Common sense suggests that the core of the surfing population is living by or within a reasonable proximity to the sea where “decent” waves come ashore. Whilst we can make these assumptions, Billabong still needed to do research in order to market effectively to the correct target segment.

Such areas of particular interest include, age, gender, culture, lifestyle and sport specific interest groups. (Wellington 2011). Through our research we have found that the average age of a surfer is 27 years old (Collier 2010). 70% of all surfing participants are under the age of 35 and the recommended age for child to start surfing is 10 (SGMA 2011). According to Billabongs CEO, Derek O'Neill, and the annual report of rival surfing manufacture Quicksilver, the main segments targeted by the surf brands are teenagers and young adults up too, but not limited to, 24 years old.

There is more than one way how this specific target segment maximizes the companies’ revenues. Teens and Tween’s are in the process of physical development meaning that the wetsuits they buy today are likely to be outgrown within a one or two year period and a replacement will be sought after. Those included in the age group up to and around 24 years old, generally have more free time to ‘hangout’ and ride wave’s, therefore wearing out their equipment and accessories quicker than a group of ‘non die hard’ surfers who surf casually on the weekend.

This group is generally older than Billabong’s target group and has already finished their studies, running their lives with small amounts of leisure time and the possibility of depleted physical fitness and

development. They can generally maintain clothing in a reasonably high standard due to a considerable difference in usage rate compared to the younger audiences. Those classed as seniors, generally above the age of 65, comprise one-third of the adult market and have greater purchasing power, but they do not have the same needs or wants towards the garments desired by the younger generations.

Once the target group is known, narrowcasting and concentrated marketing can be used to influence consumer consumption habits. Billabong concentrates marketing through its sponsorship of surf competitions, professional surfers, peers, the issuing of surf magazines and specialized websites on the internet. The use of narrowcasting and concentrated marketing is generally seen as more cost efficient in targeting a known audience than broadcasting to the whole population. Surfers consider themselves as a part of surf culture, where fashion plays a considerable role.

Surf wear is a style of casual clothing inspired by this culture and this enables Billabong to target this segment efficiently with diverse promotional appeals. Young people are considered open-minded, often failing to perceive risk and tend to be consumer innovators. This is maybe because young people are spending their parents’ money which changes the perspective of use, therefore being easily targeted by brands. It has been suggested that adolescents do not understand the value of money, instead they tend to identify with the expected benefits of the desired product.

If their need is not fulfilled with the purchased brands product, they are more than willing to try another brand in order to achieve their desired level of satisfaction. Wetsuits offer protection, warmth and help the user fit

into specific social groups. As we will show later in this paper, Billabong have managed to communicate these functional and positive emotional benefits successfully. Positive experience, as a young consumer, will enhance brand loyalty and has the ability to create a positive relationship throughout the lifecycle. Young people look up to those who support and care for them, such as parent and siblings.

Parents and older siblings are an important element of purchase behavior in the eyes of the younger generations. Once exposure to a brand or product has happened it continues to influence the young person’s decision making process. According to (Leon G Schiffman 2010, 164), “In examining the growth of self-image and brand connections, there is evidence that brand connections increase with age, and first develop between middle childhood and early adolescence”, which is an additional reason why Billabong targets the population from 12 to 24 years of age.

Water sports, which require the use of wetsuits, have become much more popular with women. This has provided a great opportunity for expansion to companies such as Billabong. By using counter segmentation and targeting consumer segments with the existing well-proven strategy, Billabong has successfully continued to expand their business in the direction of woman. Billabongs own brand statement infers that “Billabong is an articulation of youth culture and is best known as a core board sports and lifestyle brand that appeals to young people, both male and female” (BillabongDubai 2011).

Motivation A person has many different needs and by dividing them into different categories it helps us understand what motivates the consumer to take action. When consumers feel the need for

buying a wetsuit it could, for instance be that the water is cold or for the need of protection from jellyfish or sharp coral. We consider these needs as innate needs however there is a fine line between acquired and innate. When a need is unfulfilled it begins to cause tension within the individual, tension that has to be reduced. This tension creates a drive, which is dependent on the intended goal.

If a consumer wants to buy a wet suit this is considered generic goal. The statement implying the need for a wetsuit doesn’t specifically identify what type of wet suit will be chosen. If the consumer specifically states that he or she intends to go and buy a Billabong SGX XERO model wetsuit, this is a product specific goal. It is suggested that the more money one has the more specific one becomes. When the goal is fulfilled the tension is reduced (Leon G Schiffman 2010, 107-108). In our opinion consumers who have selected to fulfill a goal, buying a wetsuit represents a combination of avoidance object and approach object.

Since the sea is cold it is decided that a wetsuit is needed in order to stay warm. We see the motivation to buy a wetsuit as a rational motivation since it provides warmth and protection. The motivation to buy a Billabong wetsuit is emotional and is influenced by Billabong themselves. (Leon G Schiffman 2010, 108-111) If a customer can’t afford one of the wetsuits in Billabongs top line they have the option to purchase one of Billabong? s simpler and cheaper versions. The Billabong logo is still clearly visible and

this may be enough to satisfy the consumers need and goal, we can refer to this as a substitute goal.

Motivation for purchase of a product or service would not exist if there were no needs. Through our analysis we see that many of Billabong’s commercials focus on transmitting intense messages to try and provoke a feeling, need or goal. Billabong’s 2011 commercial (Billabong 2011) could evoke a need for social belonging, a goal to become a skilled surfer or create an interest in things that the consumer wasn’t aware of before. Humans tend to remember their first introduction to something new, therefore remembering the Billabong brand.

Commercials can also affect the consumer’s behavior and make them aware of the presents of more than one need, simultaneously. Consumers with different needs may seek fulfillment through the selection of the same goal. Their attraction to surfing may be to meet new people or to show off and gain respect, therefore having multiple needs and fulfilling them with the same goal. (Leon G Schiffman 2010, 113-114) When considering where Billabong wetsuits fit into Maslow’s pyramid, we looked at wetsuits and the Billabong brand separately.

By acquiring a wetsuit the consumer is trying to control their environment and this is represented by safety and security needs. We associate the purchasing of a Billabong branded wetsuit as an attempt to satisfy egoistic needs. Through the purchasing of branded products the needs for prestige, reputation, status and recognition are being satisfied. We can argue however that they could both go in other parts of Maslow’s pyramid but we believe that these two areas are most relevant for

Billabongs market segment. (Leon G Schiffman 2010, 116-118) Personality

Personality reflects individual differences. It is a way of distinguishing and “defining person’s inner psychological characteristics” (Schifman 2008, 134). Personality can be of great use for companies when they are trying to figure out the most effective use of limited resources. Personality is of particular interest to companies such as Billabong because it gives them an insight into which segments they should be targeting and an indication of the consumer’s attitudes towards commercial advising of a product. Billabong is using attractive surfers and peers to influence consumer behavior.

They are engaging consumer sexuality on a subconscious level, by playing with their ID. According to the web-site surf shrink: “On the surface, the Freudian notion that unfulfilled sexual passions lie beneath the art of surfing sounds peculiar. Then I ponder all the surfing comparisons made to sex that I’ve heard over the years, and (it) brings me back. I recall Mark Richards (Australian surfing champion) once stated”, “There is nothing better than sex and tube rides. ” “Difficult choices between having sex (and) going surfing eventually arise in some form.

Such situations are undeniably Freudian. Surfing must either fill a direct natural desire or unconsciously supplant some other primal one (sex, aggression) indirectly. Freud would argue the later” (SurfShrink 2010). The surfing population represents an excellent example of the Neo-Freudian classification of individuals since they are the perfect mixture of all three characteristics. Firstly, they have the desire to be loved and wanted, this is why they are part of surfing subculture, and this is a characteristic called compliant.

Secondly, they love to

win the admiration of others, many surfers love to show off and surf in front of a full beach, this characteristic is known as aggressive. Lastly surfers spend a large amount of their time alone, in the sea and detached from society waiting for the perfect wave. (Leon G Schiffman 2010, 139-140) In the following paragraphs we are going to analyze how Billabong influences consumer behavior according to the consumers’ psychological characteristics which are also known as their traits. The most important traits are connected with a consumer’s innovativeness, materialism and ethnocentrism.

When considering innovativeness, we have established that surfers have the need to differentiate themselves from their surroundings in order to be considered unique. Surfers are considered ready to innovate in the domain of their interests and are in constant seeking of sensation. Billabong is trying to influence consumers who are considered visualizers, highly dogmatic and other directed. Examples of influential material can be seen through Billabongs use of famous surfers in their advertisements and naming collections after them.

Grant McCracken, a respected author of books reflecting on professional endorsement, says “While not relying on the personality of one designer, Billabong utilizes the ‘celebrity designer’ in some stories, often naming the collection after a professional surfer who will endorse it” (McCracken 1989, 310). In addition Billabong can be seen to be using peers in their advertising with examples such as Billabong’s latest commercial on the website which states “We asked a thousand surfers what makes the perfect wetsuit” (Billabong 2011).

Consumers who have a low dogmatic personality are more likely to choose brands depending on the factual product differences and benefits.

Substantial product information on Billabongs website is not available at first glance, and is suited towards those with a low need for cognition and react to visual information, ‘visualizers’. However, after two clicks consumers who prefer to make decisions based on verbalizers, are met with detailed product descriptions and numerous related facts and characteristics. This has a significant impact on the consumer’s decision making process by effecting verbalizers and inner-directedness traits.

Billabongs webpage has the ability to influence the decisions of consumers by influencing multiple personality factors. On the Materialism Scale, (Leon G Schiffman 2010, 150) we see consumers of Billabongs wetsuits as part of centrality, since they only buy things they need and are generally satisfied with the simple things in life. Furthermore, surfers as part of a surfing subculture are considered cosmopolitan, meaning that they are very open to foreign products and choose Billabong due to it being regarded as a surfers brand and not only its Australian heritage.

Billabong is, in our opinion, a brand with a strong and positive personality. According to Nation Branding Info, a website specializing in measuring national brand images, Australia sparks initial images of sunny weather, sandy beaches and barbeques, which is why it is included in the top ten in terms of valuable national brands (NationBranding. info 2011). Billabong is an extension of the valuable and welcoming Australian brand image.

Billabong’s wave logo implies excitement and by having the best surfers wearing or holding their products they offer both experience and competence, both of which are part of the brand personality framework. Competence and authority are also underlined in Billabongs repetitive use of the

colors blue and black. When considering wetsuits, Billabong had previously used surfing imagery to portray wetsuits as a male product, this was mostly correct until the early 90’s, however now that personification is fading.

Billabong advertisements generally contain highly skilled surfers, having a great time and hanging out within the beach environment, these are attributes that a potential consumer may wish to emulate. They may view the purchasing of a Billabong product, in our case a wetsuit, as a sign that their traits, skills, habits or relationship are likely to be enhanced. These all contribute towards the makeup of the self-image and striving to achieve the stages known as expected and “ought to” self.

Perception When watching a Billabong advertisement, the sensory receptors of the average consumers are exposed to a variety of different stimuli. These stimuli have the ability to influence the eyes and ears receptors. Potential consumer’s eyes are influenced by the bright colors of young surfers in wetsuits surfing on big waves. The accompanying loud, energetic music enables the stimulation of the ear receptors (Billabong 2011).

Through inducing stimuli Billabong is trying to influence consumer purchase behavior, with the consumer’s response dependent on their interpretation and perception. (Leon G Schiffman 2010, 175) Although almost all of Billabong’s advertisements consist of surfers, waves and music and from year to year they can be seen to vary the stimuli. When observing a Billabong advertisement in 2006 there are bright colors, surfers riding the wave with loud music in background. In the 2010 advertisement’s, all of the same stimuli are present however they are now enhanced.