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, January 14, 2013

Marketing 101: Variety Seeking Buying Behavior

In previous posts I examined Complex Buying Behavior, Dissonance-Reducing Buying Behavior, and Habitual Buying Behavior.  Finally, we will quickly define Variety Seeking Buying Behavior.

Variety Seeking Buying Behavior
Variety Seeking Buying Behavior refers to situations where there is low consumer involvement, but the consumer perceives significant differences between the brand options in front of them.  In variety seeking situations consumers tend to do a lot of brand switching.  There is no real brand loyalty.  Common variety seeking types of products are cookies and crackers.  Let's take a quick look at crackers.

Consumers may already have a few beliefs about crackers.  However most consumers will buy a particular brand with very little evaluation before the purchase.  In fact in product categories such as crackers, evaluation tends to happen during consumption of the product.  Beliefs and attitudes will come during the experience of eating them, or using them at parties.  The next time the consumer is ready to buy, they will sometimes buy the same brand if the experience was favorable.  However, they may also pick another brand purely out of boredom or to just try something different.  All of this happens for the sake of variety rather than any negative beliefs or attitudes about the cracker brand.
The marketing strategy might differ for the market leader versus the competitors trying to grab market share.  Leaders should encourage habitual buying - dominating shelf space and keeping shelves stocked, running frequent reminder advertising.

Marketers should encourage variety seekers to buy by using lower prices, special deals, coupons, samples, and ads that have messaging that give reasons for trying something new.

Monday, January 7, 2013

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.

Wednesday, January 2, 2013

Marketing 101: Dissonance-Reducing Buying Behavior

In my last post I examined Complex Buying Behavior.  Next, let's quickly dig into Dissonance-Reducing Buying Behavior.

Dissonance-Reducing Buying Behavior
Just like Complex Buying Behavior, consumers with Dissonance-Reducing Buying Behavior have high amounts of involvement.  However, buyers in this behavioral situation are perceiving very few differences among the brands they are selecting products from.  The key word here is perceiving.  There may be many real differences between the different brands, however the buyer's beliefs about the other brands are that there are very similar or essentially the same.  Let's examine a common product such as paint.

Choosing paint for the interior of your house is an extremely expressive process.  The colors a person may choose are varied and will always vary from person to person depending on their highly personal tastes.  Paint can also be expensive, with some brands costing over $20 per gallon.  When a consumer finds a group of brands in a determined price range, their understanding of the difference between brands may be very low.  As a result, a consumer may do some research, but in the end, they may be swayed by price or convenience of purchase in the end.

Post-Purchase Dissonance
Post-Purchase Dissonance is another way to say "after the sale discomfort".  It's also the on-set of "buyer's remorse".  Post-Purchase Dissonance will begin once a consumer begins to "notice" any disadvantages of their purchase, and begin to hear "good" things about the other products they did not buy.  To counter these feelings, marketers should be running after-sale communication campaigns with focused targeted messaging.  These campaigns should give encouragement and help support consumers, convincing them to continue to "feel good" about their brand choice.  These marketing campaigns should also be encouraging additional purchases or referrals, offering discounts and incentives for additional purchasing.

Tuesday, December 4, 2012

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.

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.

Motivation
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.

Perception
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.


Learning
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.