Marketing 101: The Buyer Decision Process - Need Recognition

Over the past few months we've spent the majority of our time exploring the many ways consumers are influenced throughout the buying process.  First was an overview of Consumer Buying Behavior, which we placed into the Model of Consumer Buyer Behavior.  We summarized that [1] Consumers "ingest" marketing and other stimuli, such as the four P's: Product, Price, Place and Promotion [2] the stimuli enters their "buyer black box" [3] the "black box" creates buyer responses.

Next we looked at Cultural Factors affecting consumer purchases, noting that Cultural Factors are some of the strongest influences of consumer buyer behavior, because they are the set of basic values, perceptions, wants and behaviors that are "learned" by a consumer from their families and other important social institutions.  Also recall the fact that we need to remember that every group or society has a culture influencing them in some form or degree.

Along with cultural factors, there are also Social Factors affecting consumer buyer behavior.  Human beings are social, and they need people around them to interact with and to discuss various issues in order to reach better solutions and ideas.  We learned that these social factors typically consist of the consumer's small groups, their family, and their social roles and status.  We also learned about social roles such as Initiators, Influencers, Deciders, Buyers, and Users.  These roles play a part within social groups consisting of friends and familes.  We also quickly examined how economic status enables or disables a person's abilties as a consumer.

On top of the social factors affecting consumer buyer behavior, we also have Psychological Factors.  The consumer's own personality is constructed by the unique psychological characteristics that create relatively consistent, lasting behavior in response to their own environment.  These characteristics include Self Concept, Motivation and the five motivational needs, Perception, Learning, and Beliefs and Attitudes.  In summary, all of these factors and stimuli illustrate an important point: consumers are complicated.  Now let's see how complicated reaching a buying decision can be.

Defining the Buyer Decision Process
The Buyer Decision Process is conducted by a consumer before, during, and after the purchase of products and services.  Purchasing decisions are usually considered to be psychological constructs, because although we never "see" a decision, usually we infer from observed behaviors that a decision has been made. Therefore we are able to conclude that a psychological event, the "decision", has occurred. This assumption of a process suggests a commitment to action; that commitment to buy.

The Buyer Decision Process is usually split up into 5 distinct stages that typically occur in a certain order: Need recognition > Information Search > Evaluation of Alternatives > Purchase Decision > Post-Purchase Behavior.  This order seems to suggest that a consumer will pass through all five stages, however this is not always the case. Often with habitual buying behavior a consumer will usually skip or reverse some of these steps in the Buyer Decision Process.  However one step, Need Recognition, is never skipped.

Need Recognition
The first stage of the buyer decision process is Need Recognition.  Need Recognition refers to the instance where a consumer recognizes that a need or problem exists that needs to be satfisfied.  Need Recognition is usually triggered by an internal stimuli when a particular need, such as hunger or thirst, rises to a high enough level to become a drive.

External stimuli can also create a need and lead to drives.  For example, advertisements that consumers hear and see, or discussions with other people can cause them to consider buying a particular product.

When preparing a campaign and settling on your target audience, you need to conduct research that helps you define the needs of the consumer, how the needs arose, what stimuli brought them about, and how that stimuli led the consumer to determine they needed your product.

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Marketing 101: Habitual Buying Behavior

So far we have examined Complex Buying Behavior and Dissonance-Reducing Buying Behavior.  Next, let's quickly look at Habitual Buying Behavior.

Habitual Buying Behavior
Habitual Buying Behavior refers to situations where a consumer has low involvement in a purchase, and is perceiving very few significant differences between brands in a given product category.  So many products fit into this scenario.  Most of them are everyday use products and commodities, such as toilet paper, salt and black pepper.  Let's consider black pepper.

There isn't much to ground black pepper.  Unless you are actively cooking as a hobby (or a profession), you just need some pepper to throw into your mac-and-cheese or season the mashed potatoes on your plate.  There is very little consumer involvement in this product category.  Typically a consumer will go to the store and reach for a brand.  If the consumer grabs the same brand repeatedly, this is almost always habitual buying, not brand loyalty.

In these scenarios the consumer's buyer behavior doesn't go through the normal belief-attitude-behavior sequence.  Instead, consumers passively learn about low involvement products and brands through passive consumption media - television, radio, and Hulu ads.  Because consumers are buying based on brand familiarity, marketers must use ad repetition to build brand familiarity instead of brand conviction.  In order to encourage sales, marketers will need to use tactics such as price and sales promotions to initiate product trial.

Marketers should create messaging that emphasizes only a few key points.  Marketers should also use more visual symbols and imagery within their advertising, because they can easily be remembered by the consumer and associated with the brand.  Ad campaigns should have high repetition rates and the  duration of messages should be short.

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Marketing 101: Complex Buying Behavior

The process consumers use to buy products and services is different for every individual and every category of product.  However, we have been able to categorize this behavior based on their degree of involvement, and the degree of difference between the brands in the product category.  There are four types of Buying Behavior:

1) Complex Buying Behavior - Has high involvement with significant levels of differences between brands.
2) Variety-seeking Buying Behavior - Has low involvement with significant levels of differences between brands.
3) Dissonance-reducing Buying Behavior - Has high involvement with very few differences between brands.
4) Habitual Buying Behavior - Has very low levels of involvement and very few differences between brands.

Let's start by examining Complex Buying Behavior.

Complex Buying Behavior
Complex Buying Behavior defines buying scenarios that are characterized by high levels of consumer "involvement" in a purchase decision; with significant amounts of perceived differences between brands in the product category.  Involvement refers to actions the consumer must take to understand the product or service they are motivated to buy.  When high involvement is necessary, the consumer does whatever they can to learn: research, read reviews, talk to others, and "test drive" different models at retail locations.

High involvement tends to be associated with products that are more expensive, infrequently purchased, technologically advanced, and highly expressive of the buyer's personality profile.
The involvement process helps the consumer understand the differences between the brands of products they are motivated to buy.  This process is where the consumer develops (and sometimes changes) their beliefs and attitudes.  These beliefs and attitudes, along with their buying motives, will influence the consumer's decision.

Marketers of high-involvement products need to have an understanding of the buying process.  It is their job to help the consumer learn about their product, and create messaging that influences the buyer's beliefs and attitudes about competitor's products.  Understanding your target customer's Personality Profile is a key component of your marketing plan.

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Marketing 101: Cultural Factors Affecting Consumer Purchases

In my last post I discussed the basics of Consumer Buyer Behavior, and I explored the Model of Consumer Buyer Behavior.  We are going to continue our discussion by exploring the various characteristics affecting consumer buying behavior.  Recall that consumer purchases are not just simple one-and-done affairs.  They are affected strongly by cultural, social, personal, and psychological factors.  These are all factors that we cannot control, but we have to take them into account or else our marketing is ineffective and money is washed down the drain.  Let's begin by examining Cultural Factors.

Cultural Factors
Cultural Factors are some of the strongest influences of consumer buyer behavior.  Cultural Factors are the set of basic values, perceptions, wants and behaviors that are "learned" by a consumer from their families and other important social institutions.  "Culture" is the most basic source of a consumer's wants and behavior.  It lives at the foundation of a consumer's world view.  Culture is mostly a learned behavior, being constructed by the society a consumer grows up in. That society "teaches" the consumer basic values, perceptions, wants and behaviors.  What a consumer is "taught" can vary greatly in different parts of the world.  For example, in the United States a child will learn such values as liberty, democracy, freedom, American Exceptionalism, working hard, making your own success, and family values. Children in many Asian countries will learn such values as social harmony, concern with social and economic well-being instead civil and human rights, loyalty towards authority and the well being of the family over the well being of self.

Marketers need to remember that every group or society has a culture.  Cultural influences can and will vary greatly from country to country, social group to social group.  If you do not account for these values in your marketing plans, your campaigns could be ineffective, and at worst embarrassing.

Subcultures
Every cultural group has numerous subcultures.  Subcultures are groups of people that have a set of shared values based on common life experiences and situations.  Subcultures can include different nationalities, religions, racial groups, and geographic regions.  Many of these subcultural groups make up important customer segments.  Because of this, marketers are designing products and marketing campaigns that are specifically tailored to their needs and wants.  An example of a growing customer segment and subculture is the "mature" consumer.

The MetLife Mature Market Institute published a report in 2010 summarizing this growing consumer segment.  In 2009 there were over 39 million people over 65 years of age, the majority of which are female.  The majority of these people were reported as healthy and active.  The top three areas of annual spending were in housing, transportation and food/beverage categories.  Armed with basic information such as this, many CMO's are finding opportunities to create new messaging campaigns for existing products to grow sales in this growing customer segment.  

Trends
CMO's and marketers need to always try to notice cultural shifts in order to discover new products that might be desired by consumers in other cultures and subcultures.  Recent trends that have developed over the past decade are the growth of health and fitness over junk and processed food products, and the personal entertainment market which has grown as group and family entertainment in the living room has decreased (think tablets and Netflix).  It is your responsibility to keep an eye on your customer segments, their cultures, subcultures, and any new trends that effect them or may bring new groups of customers to your products.  Are you?

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Marketing 101: An Overview of Consumer Buying Behavior

There are many mysteries in life.  Love, happiness, success, the meaning of life, teenagers, and for marketing professionals, consumers can be the biggest nut we try to crack and understand on a daily basis.  It's our job to understand how to convince our target market to buy what we have to offer.  How do we get them to see the value in our messaging so that we can get value from them in return?  It all revolves around the "mystery" of consumer buying behavior, and the factors that affect it.

What is Consumer Buyer Behavior?  Consumer Buyer Behavior refers to the behavior of the final consumers.  These consumers are the individuals and households who are buying goods and services in the marketplace for their own personal consumption.  It is important to note that I did not mention the word "business".  Consumer Buyer Behavior focuses on B2C transactions, not B2B transactions.

Consumer Buyer Behavior is a "mystery", because consumers vary greatly in their demographics and individual characteristics.  No one buyer is alike another.  However some groups of buyers do act similarly to each other.  In order to study buyer behavior, we have had to create a model to answer the central question of how consumers will respond to different marketing efforts and stimuli.  It's called...the "Model of Consumer Buyer Behavior".  Original, I know.  This stimulus response model is our guide.

The model looks like this:

[1] Consumers "ingest" marketing and other stimuli > [2] the stimuli enters their "buyer black box" > [3] the "black box" creates buyer responses.

It starts with marketing and other stimuli.  When we consider marketing stimuli, we usually focus on the "4 P's": Product, Price, Place and Promotion.  When we are examining other stimuli, we usually look at internal and outside economic, technological, political and cultural factors that influence the buyer.

All of that stimuli enters what we call the "buyer black box"... the brain.  This "black box" contains all of the characteristics of the buyer.  The buyer characteristics influence how he or she perceives the marketing stimuli, and creates a reaction.  The "black box" also contains the consumer's individual decision process, which is used to evaluate whether or not they will purchase a product.

Finally, this black box creates the "buyer response".  This buyer response influences the choice of product, their individual brand choice, the choice of dealer, the timing of the purchase, and the amount of money they will be spent on the goods and services.

Over the next few weeks we will be examining these characteristics as they affect buyer behavior, and discuss the decision process that the consumer follows.

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