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?

Monday, March 25, 2013

Marketing 101: Purchase Decision

In my examination of the Buyer Decision Process I've explored the first three steps: Need Recognition, Information Search, and the Evaluation of Alternatives. Generally the completion of alternative evaluation will lead to our fourth step, the Purchase Decision.

The Purchase Decision
We can define the Purchase Decision simply as the consumer's choice of which brand to purchase.  Once the consumer forms their beliefs and attitudes about a product segment's brands, the consumer will usually purchase the most preferred brand.  Notice that I said usually.  Sometimes two factors can come between the purchase intention and the purchase decision: the attitudes of others, and unexpected situations.

Sometimes the attitudes of others can change our minds before the sales transaction. For example, someone in a family group or social group might think that you should get an Apple iPad instead of a comparable competitor's tablet device.  If this person is important enough in your life, they may exert enough "peer" pressure to cause you to suddenly alter your attitudes and beliefs, greatly reducing the chances of you buying another brand of tablet.

Your tablet purchasing decision may also be altered by our second factor: unexpected situations.  Consumers will usually form their purchase decisions based on factors such as their current income level, expected prices, and assumed product benefits.  However unexpected events often will change their original purchase intention.  Some examples of purchase altering situations are unexpected sales, competitors dropping their prices, a sudden economic downturn, or a sudden change in employment.

Marketers need to understand that their work is not done once a consumer reaches the point of making a purchase.  Because consumers can, and often will change their minds, consistent messaging needs to be placed in front of the consumer all the way up to the actual sales transaction.  Even then our job is not done.  In my next post I will explore Post-Purchase Behavior.

Tuesday, March 5, 2013

Marketing 101: The Buyer Decision Process: Evaluation of Alternatives

In my examination of the Buyer Decision Process, I've started by exploring the first two stages: Need Recognition and Information SearchNeed Recognition refers to the instance when a consumer recognizes that a need, or problem exists that needs to be satisfied, ie: I need a new refrigerator.  If the need is strong enough, an Information Search is usually initiated.  As a consumer does more research they will inevitably become aware of competing brands and products that are available for purchase.  It is at this point that the Evaluation of Alternatives begins.  An Evaluation of Alternatives is the stage of the buyer decision process in where a consumer uses the information gathered in the Information Search to evaluate alternative brands in the product category.

So how does a consumer choose among these alternatives?  The truth is that there are several processes at work inside the consumer's mind, forming beliefs and attitudes about all of the products to choose from.  However these processes all "evolve" based on the individual's buying situation.  The situation evolves from the set of attributes the consumer is choosing to evaluate products by.

Let's say a consumer is evaluating the attributes of a groups of computers. They have identified four attributes: performance, design, price, and value.  During the evaluation the consumer will place different levels of importance with each attribute based off of what is most important to them.  The consumer will "evaluate" each brand and form beliefs on how each brand rates on each attribute.  The consumer may turn to friends and family, consult consumer reviews, or discuss their situation with sales people during the Information Search.

We know that all brands vary in their degree of appeal to each consumer.  A consumer may buy a brand based on a single attribute, or a number of them.   If during the Information Search you were able to deduce how a consumer assigned value to each attribute you could predict the buying behavior more accurately.  Marketers must study buyers to discover how they actually evaluate brand alternatives.  If you know how your target customer's evaluation process occurs, you can take steps to influence the buying decision early on and lead the buyer to purchase much faster.