Consumer Decision Making
Helen Strong
Consumer Decision Making: Purpose
From personal experience we are familiar with the process that we follow when buying a product. We use this model to become conscious of the factors that influence our target market’s decisions made during the purchase cycle.
In turn, that will define the information that we need to collect to let us understand the process and then sway the choices of consumers when purchasing products in our market.
Consumer Decision Making: Structure and Description
Many decision-making models are based on the premise that consumers demonstrate rational behavior in their buying decisions. This is not necessarily the case. The type of product being bought; the personality of the consumer; his or her psychological and cultural factors; social and economic environments will all mold the way in which the consumer arrives at the buying decision (Figure 12.1).
We need to know what constitutes those influences. How are they formed? Who are the thought leaders and role models for your particular product? Do friends and family have the major influence on what is bought? What values are brought into play when purchasing products in your industry? For example, a family man will want safety and reliability in the vehicle purchased to transport his family. A single man will want to impress his colleagues and partners, choosing speed and style above all else.
Figure 12.1 Consumer decision-making model
Consumer Decision Making: Strategic Considerations
We need to understand what type of product we are offering and its role in our consumers’ lives. This is because the buying process changes with the importance placed on the decision process and the risk it poses to the consumer.
If we offer goods that are bought on impulse, then we need to understand what sparks the impulse, when it is experienced, and possibly even where the need arises. If, for example, we know that people coming out of a gym will be hungry or thirsty, then it would make sense to place a vending machine for our snack products at the exit. And who has not fallen foul of the sweets and magazines that are displayed along the corridors of the supermarket till line?
If consumers routinely buy a product and have your brand on the list, that is, it is a planned purchase, then we need to know: How does it become a planned purchase? What contributes to the consumers’ buying loyalty, and what would cause him or her to substitute or change the purchase? The discussion that follows will examine factors that influence the buying decision.
Another type of purchase is the planned, but complex decision. Here we are talking about major items such as cars, homes, and other major ticket items. In this instance, the risk of purchase is magnified, and the marketer needs to understand the consequences of that risk for the consumer.
What safety nets need to be put in place? How can the consumer be helped to bridge the gap between desire and action?
Consumer Decision Making: Implementation
The Nature of Consumers
When determining target markets, one of the first variables examined is the demographic profile of the people who will buy and use the product. Sometimes age and experience are associated with brand choice. Education levels in particular may be one of the determinants in the trade-offs between functionality and image.
Segmentation of the market is a useful tool in designing marketing campaigns and the associated mix elements that will appeal to particular parts of the market. The segment needs to be large enough to warrant the dedicated expenditure, and be sufficiently different to enable precise positioning of the product.
We will need to understand the values of the people who use, and who do not use our products. Are they outgoing sophisticated people? Stay-at-home introverts? Active sporty individuals who have an interest in health and the outdoors? Knowing this basic information helps form the marketing strategy and allows the creative team to place the brand within the right context to generate consumption of your products. If you have correctly identified the environment of the target market, they will feel comfortable in accepting the product message.
Recognition of a Need
As marketers we will obviously have tried to provide sufficient information for consumers to associate our product with their perceived need. In some cases, we will even have tried to create a need. (But there is debate as to whether that is possible or not!)
What signals does a consumer use to recognize that they need a product? Knowing this, it is possible to build these messages into the communications put out to the consumers to stimulate a natural choice for them.
Specifications
Understanding how a consumer uses a product and the purpose that it serves in his or her life brings you half-way to designing the product that fulfills that function. Remembering that perceptions are reality, the way in which the product is perceived by the consumer is crucial in obtaining affiliation. The knowledge you need to become the specified brand lies in the functionality required by the consumer, the emotions associated with its use, and the assurances required to make him or her comfortable with the purchase.
Marketers need to know what questions the consumer is going to ask about the product. In turn this defines the expectations that need to be measured in the market. Variables include:
- Does the product actually function as I need it to function? And what alternatives do I consider when making a choice in this product area?
- Quality: How does the consumer define quality, and what is considered to be good quality for this product class?
- Service: What level of service is expected? And what for the consumer are the indicators for poor, acceptable, and outstanding service? Does fast outweigh efficient?
- Cost or value for money: What are the perceptions of the product when it is offered at different price levels?
- What is the extent of word-of-mouth (WOM) influencing purchase? These days include Facebook and Twitter within the definition of WOM. It is essential to establish the reference points used by your consumers.
- Is the technical skill, qualifications, or experience of the supplier an important factor for the consumer? In some areas (medical, for example) patients do not want to take a chance with their health. They will put up with some doctors’ arrogance and lack of old fashioned bedside manner, if they believe that they will be cured. Where the consumer requires a customized product, then expertise becomes a major factor.
- In some instances, convenience and location play a large part in the purchase decision. In banking, however, the introduction of electronic banking and ATMs has revolutionized the selection factors. A friendly electronic funds transfer (EFT) system can far outweigh the physical location of branches.
- Consumers may not even be aware of the role of psychological factors in the buying decision. They will rationalize purchase of a product that gives them a personal lift, by claiming for example that it is of a better quality or more cost efficient.
- Is the attitude and friendliness of staff a deciding factor? In service industries, this can be a deal breaker if staff does not accord clients the respect which they feel they deserve.
Searching
To be included in the list of possible suppliers, first establish the natural sources of information for consumers. Who do they talk to? Different people or sources will be the reference for different products. A technical purchase like laptops or iPods will rely on the evidence of experts. Fashion purchases will be influenced by the reactions of friends.
What media do they interact with? You will want your product to be seen in the recognized expert sources for your industry. Have you managed to send information about your product already via a newsletter or e-mail? Are you present at association meetings and events that allow you to network with your target market?
And these days: How do you use the power of search engine optimization (SEO) to bring your web page to the front of the queue? It is no longer a question of whether you have an Internet presence, but how effective is that presence? There are a number of services that will examine the effectiveness of your web pages and advise on how to improve the web metrics (such as number landing, click-through rates, time spent, number of enquiries, and conversions to purchase).
Quotes
How easy is it to obtain product information and a quote from your company? Does the consumer have to jump through hoops before you respond? Or do you ease the process by providing a simple enquiry process, the required information, and even the information that the consumer does not know that they need?
Examine your quotations to see if the consumer’s information needs are met. Ensure that the follow-up process is in place and that there is an opportunity to make contact with the consumer to explore any objections or problems that he or she may have with your product.
Evaluation and Selection of Suppliers
Again this is where you need to have done your homework regarding the selection criteria that will be applied. If you know that concern with maintenance is an issue, address this in the quotation or pamphlet that is provided for the consumer. If, for example, your research shows that backup service and quality are the two most important factors, make sure that the evidence is there to support your claims that you will be the best company to provide this support.
Placing the Order
For larger purchases, in particular, many issues can intervene between choosing a supplier and actually placing the order. Be aware of how contracts have been impeded before and check out the current situation to see if you need to avoid any of them.
Postpurchase Blues and Performance Review
Ask anyone who has bought a new car and they will tell you that they have seen so many cars like theirs. In effect, they are reducing their postpurchase cognitive dissonance (that is, looking for reassurance that they have done the right thing). Hence to check whether consumers are satisfied with their purchase and to give them reassurance, you will contact them in a short while after making the sale.
The contact has a couple of purposes. It will give you an opportunity to conduct research on their first feelings and impressions... and to find out if there are any issues that need to be attended to, to maintain a good relationship with the consumer. In today’s world, we concentrate on building relationships with our consumers so that we can build brand loyalty and repeat purchases. This forms the subject of another model, so we will not go into detail here.
Consumer Buying Decision: Conclusions
Product purchase is based on more than the physical attributes and functionality of the product. The consumer wants a feeling of trust when dealing with a supplier. This is built on organizational performance and the manner in which the consumer experiences the purchase. The supplier’s reputation and corporate social responsibility are important elements in the decision equation. Consumers do not want to associate with companies that do not recognize their values and lifestyle.
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