Consumer Behavior

I. Context and Problem/Opportunity

In the following text I’m going to target the topic Influencing Oil and Petrol Consumption. The oil spill in the Gulf of Mexico has a catastrophic long-term effect on the environment and especially the marine life. This is reflected in a shift in consumer behaviour. A growing number of people are refusing to purchase their petrol from BP stations. One reason for this development can be the changing attitudes towards the company. In order to increase the consumption rates marketers have to figure out how this accident infected consumers attitude, how this is expressed in the consumer behaviour and how to change these attitudes towards BP.

II. Literature Review

In 1984 James E.Grunig and Todd Hunt proposed several theories to crisis management of large companies. Two major parts are the apologia theory and the image restoration theory. The very basis of these theories is a proper response of the company towards the public (customer) and political audience (James Grunig as cited by Kathleen Fearn-Banks, 2007) Learning from the Valdez fiasco in 1989 authors like Steve Adubato (2008) stated that understanding the narrow window of opportunity to react is crucial for a successful crisis management.

To show genuine concern for the situation it is important to send a high representative to the scene on short notice (Steve Adubato, 2008, p.24). Showing responsibility and direct reaction are also seen as most important in a crisis situation by authors like Steven Fink. “He was right to stay put but wrong to stay silent.”(Steven Fink, 1989).

He also stresses the importance of statements by high ranged representatives of the company. All that is important to let the public know that he is in charge and that the company can control the crisis management process (Steven Fink, 1989). To be prepared for this situations properly companies should have a crisis management team (Harland Warner as cited by PR news, 1998). Regarding to the oil spill in Prudhoe Bay 2006 caused by BP experts like Elaine Cruikshanks (as cited by Sarah Murray, 2006) already showed concerns about the communication of BP in difficult situations.

According to Kent Jarrell (as cited by Jason Notte, 2010) BP is now faced exactly with this problem of severe lacks of communication after the oil spill crisis in the Gulf of Mexico. Since BP is now in the focus of the media he points out that minor mistakes by publishing wrong information can be crucial for the reputation.

The company should separate the people working on the crisis and those who are speaking about the next steps and the strategies. BP made some communication mistakes by manager, who made instant response from the site. Due to continuously upcoming litigations against BP the company will lose a lot of credibility on the long term (Kent Jarrell, as cited by Jason Notte, 2010).

Like stated in the theory by James E.Grunig and Todd Hunt the other major group to address is the political audience. It is important to have the government supporting the company in every press conference (Kent Jarrell, as cited by Jason Notte, 2010). In this case the government of BP’s largest market stopped holding briefings and acts as an adverse party.

President Obama treats the spill as a national emergency and comes down hard on BP (Fiona Harvey, 2010). Multinational companies, like BP now is, tend to lose the backup of their home country due to globalisation (Daniel Gross, 2010, para. 3). This weakens the company’s position to gain back credibility. According to Miss Harvey this has direct effect on the consumer. She writes that the company's reputation is plumbing an all-time low, in the US and internationally (Fiona Harvey, 2010). Gasoline stations selling BP’s petrol are the very first one that experience aversive reactions of the consumer. Total sales at BP stations there declined 8%-10% in May compared with last year, while competitors benefited from additional traffic.

Consumers opinion is spread very fast due to social media like facebook and twitter.(Jim Smith as cited by Naureen S. Malik, 2010). This affects BP very hard since some of these station owners weigh a change in their fuel supplier (Naureen S. Malik, 2010). On the contrary experts like Marc Harris points out that the consumers are just not worried enough to change their purchase behaviour in the long term. 72 percent of the American say that the Gulf oil spill will have no effect on their spending habits (Marc Harris as cited by Economics Week, 2010).

III. Theory/ Model / Framework

In the following I’m going to apply the Elaboration Likelihood Model proposed by Richard Petty & John Cacioppo (1986) as a Framework to the problem stated. The model acts on the assumption of two general ways of procession. One is peripheral way and the other one is the central way of information processing. Applying this to the BP crisis we can differentiate between two groups of consumer/ non-consumer.

One group is highly involved in the problem of the consequences of BP’s oil spill (central way), the other one is only peripheral involved (peripheral way). People that are highly involved have already gained a lot of information about the problem and have evaluated the personal relevance for them. These people feel responsible to act and search for information about the spill and consequences. These people listen very carefully to every statement of the management of BP.

They feel also addressed if the company does not show enough response to the problem, which is one of the crisis management mistakes according to Kent Jarrell (v.s.). All in all this leads to an enduring and resistant consumers attitude change (cognitive structure change). Therefore it is important for companies in crisis to react quickly as stated by Steve Adubato. If the person is low involved her position relies on peripheral cues. Expert sources/ statements and quantity of arguments are important to form the person’s attitude. The attitude formed is very temporary and susceptible but can be lead to the central way by adding relevance for the person in the second step.

IV. Recommendations

In the following I will make three different recommendations for BP to face the changing attitudes of the consumers after the crisis. The options I suggest will relate to the framework of the Elaboration Likelihood Model and link it with three of the 7P’s. I will focus on Promotion, People and Product.

IV.I. Promotion:

Like pointed out before BP has to gain the attention of two different kinds of consumers; the high and the low involved people. According to the Likelihood Framework Model the low involved customers/ non-customers seek primarily for expert sources and the quantity of arguments. In order to address them BP should employ external experts to report constantly from the site of the crisis. Information should be published also via new media from external sources without relating to BP directly.

To keep the positive attitudes alive and enduring the company should repeat positive information via different channels. The highly involved consumers are very well informed and seek for further information. The statements and information addressing them should be accurate and fact based.

The company should directly publish how much money it spends on abolishing the consequences of the spill and what the next steps are. It should provide the public with a detailed action plan over the next years of crisis management (cleaning). This offers the highly involved consumer the possibility to satisfy his/ her needs to interact (responsibility) by following BP achieving this goal of cleaning the environment. It is important that BP does not give out false information. Consumers who are on the central way of processing will detect it.

IV.II. People:

The central path of the elaboration likelihood model starts with the question for motivation to process. This motivation is highly influenced by the personal responsibility of the individual. It is the initial path for the development of the attitude of the highly involved people. Therefore this is one of the most important parts in the model. Like stressed by many authors it is essential for many companies to set up a crisis management team with a fixed plan in advance. This prevents chaotic management decisions and processes. BP now has to react to the crisis in disguise, but still the crisis management team can be used as a successful tool to influence the consumer attitude.

To achieve this, the company has to establish a team of people that are only in charge of managing the oil spill crisis. Next to BP crisis manager external specialists, known by the public, should be part of the team. The company should present this team to the public. Apart from the crisis management team BP should publish the number of people involved in the project of cleaning.

The more the consumer recognizes that BP cares for the situation, the less she/ he feels responsible for the situation and the less he becomes motivated to process along the central path. Switching the consumer to the peripheral path makes it easier for BP to change his attitude by using the first strategy recommended.

IV.III. Product:

As a more extreme strategy that should be suggested in case of no significant positive development of BP’s image I would recommend the following strategy, which also involves a higher financial risk and should be seen as a last solution.

Most of the consumers rejecting BP stations have are low involved. Their attitude is relatively temporary and susceptible. Time and the frequency the consumer is exposed to the event influence the person’s attitude strongly. Therefore BP should try to stay in the background and let the time cure the relationship to its customers.

One possibility to achieve this goal and to keep on selling to the customer is to merge with a small petrol company. This offers the company the possibility to rebrand BP stations in very critical areas (with high consumption refusal-rate) under the name of the other company. Creating a new image on a new brand prevents the stations from suffering under a bad image after the spill. BP should still keep contracts of supplying those stations partly with their fuel not visible to the consumer.

This would decrease the negative word of mouth publicity from these areas, since BP is not so present anymore. After a set timeframe of image-recovery and attitude neutralisation (peripheral path) these stations should be rebranded again to BP stations. One the one hand this strategy has a very positive effect on the relationship to the station owners. BP could promote this as a way of caring for the small stations not being the loser of the company’s false decisions since they are suffering under the negative image of BP the most and are very important customer.

On the other hand, according to the elaboration likelihood model, consumers that are following the peripheral path have a relatively temporary attitude towards BP. Since this attitude is negative in most cases, the company should try to use this effect of attitude change over time in order to make the consumer neutralise it. This low involvement consumer is the largest group of people rejecting BP and is important to focus on.

V. References

SARAH MURRAY. (2006, October 9). A deafening silence COMMUNICATIONS: Sarah Murray analyses corporate attitudes to sustainability and environmental management :[SURVEYS EDITION]. Financial Times,p. 2. Retrieved September 21, 2010, from ABI/INFORM Global. (Document ID: 1142917891). Jason Notte, (2010) BP's Crisis Management 'Terrible,' Expert Says, retrieved 21.09.10 from

http://www.thestreet.com/story/10773867/bps-crisis-management-terrible-expert-says.html Fiona Harvey. (2010, June 3). Group reputation at all-time low as conservation groups warn of threats. Financial Times,3. Retrieved September 22, 2010, from ABI/INFORM Global. (Document ID: 2049037971). Steven Fink (1989) BUSINESS FORUM: LEARNING FROM EXXON; Prepare for Crisis, It's Part of Business. Retrieved September 23, 2010, from http://www.nytimes.com/1989/04/30/business/business-forum-learning-from-exxon-prepare-for-crisis-it-s-part-of-business.html?scp=3&sq=Prepare%20for%20Crisis,%20It's%20Part%20of%20Business&st=cse Adubato, S. (2008), What Were They Thinking? :

Crisis Communication--The Good, the Bad, and the Totally Clueless, n.p.: Rutgers University Press Grunig, J. & Hunt T. (1984), Managing public relations, New York, Rinehart and Winston Daniel Gross. (2010, July). Death On Our shores :As a foreign company, BP may suffer hands of consumers and lawmakers.. Newsweek, 156(1), n.p. Retrieved September 23, 2010, from ABI/INFORM Global. (Document ID: 2064617331). Handling a Crisis Well Means 'Having a Bad Day Instead of a Bad Month'. (1998, February). PR News, 54(7),

1. Retrieved September 23, 2010, from ABI/INFORM Global. (Document ID: 26562034) RBC; European debt crisis and gulf oil spill having little impact on consumer spending: RBC Consumer Outlook Index. (2010, June). Economics Week,43. Retrieved September 23, 2010, from ABI/INFORM Global. (Document ID: 2059321001). Petty, Richard E.; Cacioppo, John T. (1986): The Elaboration Likelihood Model Of Persuasion. In: Advances in experimental social psychology (Ed. L. Berkowitz), 19, pp. 123 – 205. New York: Academic Press

VI. Appendices

App1.:Elaboration Likelihood Model (original)

App2.: Elaboration Likelihood Model (including recommendations)