It is very easy to jump to the wrong conclusion when you are trying to work out what went right or what went wrong with a marketing program or a specific sales activity.
More often than not, it will be a knee jerk reaction to the situation and the first reaction will be emotionally generated rather than logically reasoned. Even so, the range of possibilities will not be canvassed because a systematic process of analysis is unlikely to be undertaken.
It is all too easy to make hasty decisions and throw resources at some marketing program or sales tool. Like any complex situation, we need to have a theoretical framework in order to understand the likely outcome of any decision. We need to understand the various parts of the underlying model and how they interact. While we all have some understanding of how buyers behave, it is worth taking some time to review what we know about how, what, where, when and why buyers purchase specific products or services.
Once we have a theoretical model, we can use it to analyze a buying situation. A good theory will not only explain what happened in a past situation but is the basis for planning a future marketing campaign or buying situation.
What we are trying to do when we examine theory is to avoid major mistakes and to take advantage of the insights we gain. My main purpose is to use this information to identify ways in which you can improve the productivity of your marketing and sales efforts.
Lets start with some basics.
When we study buyer behaviour we are interested in how individuals spend their money, time and effort. We want to know how individuals or groups select, purchase, use and dispose of products and services, ideas or experiences in order to satisfy needs and desires.
The purchasing decision is essentially one of problem solving and, depending on various characteristics of the person and problem to be solved, the decision process will alter.
There are generally thought to be three major categories of purchases:
a) Those where the consumer has little or no knowledge of products or services available, has no brand preference and needs to do extensive information searching.
b) Decisions where the consumer has some level of knowledge about alternative offerings and does limited information search to compare products or services available.
c) Situations where the consumer has good brand knowledge and/or knows what they want and buys the product or service with little or no additional information search. This especially applies to habitual or frequent purchases.
Needs/Desires/Goals:
Our discussion of the purchase decision starts with the trigger to enter an information search process. The obvious cause is either dissatisfaction with a current situation or a desire to create a favourable future state. Related to this change in being is the anticipation of what the purchase decision will do for the consumer. A purchase which will solve a problem, change an emotional state or enhance a person’s self esteem is part of the discomfort felt when an intention to purchase is triggered. A moderator of this process is the product or service image and the way in which the purchase choice is seen by others.
Needs and desires are often related to the grouping established in Maslow’s hierarchy of needs. These are:
The need or desire may be internally generated, such as the need for pain relief medicine or be triggered by an external stimulus such as through an advertisement. Marketers attempt to take consumers to a purchase attention state through multiple marketing stimuli, however, the consumer may not respond to such external prompting.
Even when a desired future state is identified by the consumer, the difference in current and future states may not be sufficient to trigger further action. A modifying influence on intention is whether the consumer has the time and finances to pursue the need or desire.
Consumers are stimulated by all five senses and marketers use these to trigger a response. The smell of coffee roasting may stimulate the purchase of coffee or the scent of perfume may trigger a purchase of cosmetics. When you walk past a music store you will hear music playing to entice you to buy.
In the first instance, the consumer must be exposed to the marketing stimulus. This might be an advertisement on the TV or in a magazine or it might be a sensory trigger. Only those consumers in the right place at the right time will be exposed to the message. Consumers may simply filter the message out. In a world full of advertisements, billboards and marketing brochures, the consumer may simply ignore them – too much noise.
Marketers are hoping for a state of awareness. That is, they are seeking to gain the attention of the consumer to recognize the message – perhaps because of its size, colour, shape, humour or information content. Finally, the marketer wants the consumer to retain the message so that when a future need arises, the consumer will retrieve the message and use it in their information search. The level of retention and the time over which the message is retained will vary from one person to the next.
Consumers are much more alert to marketing stimuli if they already have an established need. The car buyer will give more attention to car advertisements and notice billboards and car sales signs.
In the case of repeat or habitual purchases, the consumer may well rely entirely on memory when making the decision on what to buy. In the situation where prior experience and/or memory are inadequate to make the decision, the consumer must seek external information.
In making the decision of what to buy (and where and when), the consumer is confronted with, often, a vast array of external information. This includes product and brand information and verbal and visual product or service characteristics. Other information comes from family, reference group and social class. You can imagine the vast array of quantity and quality of information which the consumer absorbs, some from the vendor and some from other sources. Think of the various forms of advertisements, articles, commentary, reports, websites, blogs, twitters and so. On top of that you have comments and statements from friends and colleagues as well as input from family and peers. In some sense, the quantity is overwhelming and so the consumer develops techniques to evaluate and understand the information, not necessarily without preconceptions and bias.
Information processed by the consumer may also be seen to be ambiguous, incomplete, misleading or inaccurate. At the same time, past experience, cultural norms and personal values might filter and change the interpretation of the information. Other influencing factors are the motives, lifestyle and personality of the individual, religious influence, the importance of the purchase and the pressure to resolve a need.
The evolution of the internet has seen a major change in the amount and quality of information available to the consumer. Historically, marketers had to take the initiative in providing information to consumers in advertisements or brochures. Now the consumer has the ability to readily seek out information on product and in most cases, find independent product comparison information. In many cases, consumers can also ask questions through chat rooms or blogs to gain additional information. Companies often have contact pages where questions can be submitted directly to the vendor.
The internet is becoming an increasing important source of information for consumers as these statistics show:
“58% of Americans now reporting that they perform online research concerning the products and services that they are considering purchasing.”
“24% of American adults say they have posted comments or reviews online about the product or services they buy, indicating a willingness to share their opinions about products and the buying experience with others”.
Search time and search costs are also factors which need to be considered. Information search is generally higher for intangible solutions, especially where the consumer is intimately involved in the consumption, as is the case in most personal services. The nature of service consumption is that most of the information is opinion based rather than factual. In screening products, the consumer can check technical specification and functional descriptions to assess degree of fit but when it comes to services, the evaluation is often in the opinion of the user. As consumers differ widely in their requirements, likes and dislikes, opinion by strangers may not be given much credibility. Generally the opinion of peer groups, family and friends is relied on more heavily.
Service providers are also challenged when it comes to providing information about what they do and what outcomes can be expected. Much of the service outcome depends on the personal situation, preferences, experience, attitudes and personality of the consumer.
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