The Value Proposition

Why should a consumer buy from you?

Competitive Advantages

What makes you better than your competition?

Choosing A Differentiation Strategy

You chose a target market, now what?

Tuesday, November 27, 2012

Marketing 101: Pyschological Factors of Consumer Buyer Behavior

Consumers are complicated.   If they bought things based on only a select criteria, then it would be easy to convince others to buy our products and services.  There would be no need for elaborate ad campaigns and large advertising budgets.  Unfortunately, consumers are influenced by many different stimuli, and they use many different factors to decide what to buy and when to buy it.  One of the major influencers of consumer buyer behavior is the consumer's own unique personality.

When we study personality, we are examining the unique psychological characteristics that create relatively consistent, lasting behavior in response to the consumer's environment.  We usually refer to someone's personality by traits, such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness.  Personality is extremely important, because it allows us to build a profile of our customer.  It allows us to really understand who they are, and why they buy.  You can use that profile to better understand how to tailor your products and services to that buyer, and tailor your messaging to be as affective as possible when selling to that customer segment.

Consumers aren't the only ones who can have personalities and profiles.  So can brands.  Brand personalities are the specific mix of human traits that may be attributed to that brand.  In order to better associate our brands with our target customers, we try to give them personalities that are relatable.  We use these personalities to tailor the look and perception of the brand and its messaging in the marketplace so that we can attract specific consumers to our products and services.

Self Concept
Many marketers use a concept related to personality, called Self-Concept.  The main premise of self-concept is that a consumer's possessions directly contribute to, and directly reflect their identities. Basically a person "is" what they have.   Therefore, marketers try to understand our target customers by the things that they own and the things that they buy. 

When we know the buyer's personality, when we have defined our brand personality, and when we have attempted to understand our consumer buy their existing buying patterns, we then combine all of this along with specific psychological factors to better understand their buyer behavior.  Currently we look to four specific factors of our target customers when building their personality profile:

1) Motivation
2) Perception
3) Learning
4) Beliefs and Attitudes

Let's examine these one by one.

A motive is a need that has become so sufficiently pressing that it directs the consumer to seek satisfaction of that need.  A consumer has a number of needs at any given time of their life.  Humans are constantly being influenced by various biological and psychological motivations.  Many common biological needs arise from various states of "tension", such as hunger, thirst, or some form of physical discomfort.  Psychological needs will arise from a desire for social recognition, esteem, or belonging in familial, social, or political groups.  If one of these motivations becomes strong enough within the consumer, it "becomes" a need.

Through various research marketers have identified five "categories" of motivational needs:
1) Self-Actualization: a consumer's self-development and realization
2) Esteem: a consumer's sense of self-esteem, self-recognition, and social/economic status in the world
3) Social: a consumer's sense of belonging and feeling loved in their environment
4) Satisfaction: a consumer's sense of security and level of protection in their environment
5) Physiological: a consumer's basic need for food, water and shelter

Marketer's have found that there tends to be a hierarchy of need satisfaction within the typical human being: Physical needs must be satisfied first, then a person is willing to seek satisfaction fulfillment, then a person will approach social needs, then a person will pursue esteem, and then finally self-actualization within their environment.  The basic principle here is that a consumer will almost always try to satisfy the most "pressing" needs first above anything else.  When that need is met, it will stop being a motivator, and the consumer will "move on" to the next most influential motivator in the hierarchy of needs. 

Marketers need to remember that motivated people are ready to buy.  Use that to your advantage.

How a consumer determines what they will buy is heavily influenced by their perception of the situation they are in at that moment in time.  Perception is the process by which consumers select, organize, and interpret information and environmental stimuli in order to form a more meaningful picture of the world around them.

One of the most massive forms of environmental stimuli is advertising.  On average, consumers are exposed to 3000 - 5000 advertisements everyday.  It is physically impossible for a consumer's brain to actively pay attention to all of that stimuli.  Add to that all of the other environmental stimuli around them: smells, tastes, sounds, conversations; it's a wonder that humans are able to concentrate on anything at all.  As a result, the brain controls what stimuli it will engage with.  It is this process that creates perception.  Consumers form their perceptions through the brain's distinct processes of selective attention, selective distortion, and seletice retention. 

1) Selective Attention is the tendency for consumers to screen out most of the information they are exposed to.  We have to work very hard to get the consumer's attention.

2) Selective Distortion: Every consumer fits incoming stimuli into their own mind-set - through their own set of "rose colored glasses".  Selective distortion is the tendency of people to interpret information in a way that will support what they already believe, or what they want to believe.

3) Selective Retention: Consumers will usually forget much of the stimuli they have been exposed to.  Consumers will usually store the information that best supports their existing attitudes and beliefs (or the ones they want to have), so selective retention allows them "remember" the good points they favor and "forget" the negative points that have been made about other brands that they don't like.

These processes are why marketers use so much repetition in their advertising campaigns.  We have to battle our way into the minds of the consumer, force our way in, and in the end, convince the mind of the consumer that our message is the right one to pay attention to.

When people perform an activity, they are actively learning.  Most learning theorists believe that the majority of human behavior is "learned" behavior.  Consumer buyer behavior is a partly learned behavior.  Consumers "learn" their buyer behavior through drives, cues, responses, and reinforcement.  Each one of these builds upon the other.

Drives are strong internal stimuli inside the consumer's mind that create calls for action.  These calls for action, if strong enough, will create a motive (see above), and lead the consumer to attempt to move towards an object of stimuli.  That object usually will be what satisfies the need.

Drives create Cues.  Cues refer to more "minor" stimui that condition the consumer's behavior.  Cues help the consumer decide when, where, and how to respond to a drive.

Responses are the consumer's actions based off of drives, motives, and cues from environmental stimuli.

Responses build Reinforcement, which influences the consumer's future buyer behavior.  If the purchase experience and immediate experience with the product has been positive, then the consumer will likely consider buying that same product in the future.  If the consumer's experience is somewhat negative, then they are likely to seek a different product later when the need has to be fulfilled again.

Beliefs and Attitudes
Through our daily activities, we build beliefs and attitudes that in turn influence our buying behavior.
A consumer's beliefs are descriptive thoughts that they have about something, while attitudes are a consumer's "relatively" consistent evaluations, feelings, and tendencies toward an object or idea.  Attitudes put people into specific frames of mind, and help to move them towards or away from certain products and brands.  Unfortunately attitudes can be very difficult to change.  Attitudes are a part of a consumer's learned behavior patterns.  Changing a consumer's attitudes and beliefs usually will require us try to change many other perceptions and attitudes in other areas of the consumer's mind.  Often it is easier to position a product into an existing attitude, than to fight against them and try to change them.

Marketers need to understand these beliefs and attitudes in order to best position their messaging in front of the target consumer.  If we believe some of the target consumer's beliefs and attitudes are wrong about us, thereby preventing sales, then we can understand how to launch focused messaging campaigns to change beliefs about our products and brands.

Consumers are complicated.   Their unique personalities have many facets, and all of them are involved in what is hardly a simple decision when they are choosing to buy something.  It is the marketer's responsibility to do their due diligence and learn as much as possible about their target customer.  Failing to have some understanding of the pyschological factors of consumer buyer behavior will result in unfocused messaging, and wasted marketing dollars.  Today's economic reality forces us to do enough research before starting any creative for our ad campaigns.