Archive for Purchaser

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , , on November 28, 2011 by Consultant

Consumer Behavior and Marketing Strateg

 The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how
  • The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products);
  • The the psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);
  • The behavior of consumers while shopping or making other marketing decisions;
  • Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;
  • How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and
  • How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

Understanding these issues helps us adapt our strategies by taking the consumer into consideration. For example, by understanding that a number of different messages compete for our potential customers’ attention, we learn that to be effective, advertisements must usually be repeated extensively. We also learn that consumers will sometimes be persuaded more by logical arguments, but at other times will be persuaded more by emotional or symbolic appeals. By understanding the consumer, we will be able to make a more informed decision as to which strategy to e

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , on November 28, 2011 by Consultant

 Marketing Tracks in  Consumer Behavior

Consumer behaviour is key to the impact that society is having on the environment.As well as what people consume directly in the home and elsewhere, our fulfilment of needs and wants lies behind many of the activities that create environmental impacts, such as the production of food and other goods.While new and more sustainable technologies offer great promise, they cannot in themselves ensure sustainability. Only people’s choices can lead us away from unsustainable patterns of consumption.

But there are many conflicting explanations as to why people consume:

  • some economic (to do with prices and technology)
  • some environmental (fulfilling physical needs such as shelter and food)
  • and some cultural (consumption as central to social identity).
Methodologically, consumer behaviour research uses the following types of research designs:
Based on questioning:
  • Qualitative marketing research – generally used for exploratory purposes – small number of respondents – not generalizable to the whole population – statistical significance and confidence not calculated – examples include focus groups, in-depth interviews, and projective techniques
  • Quantitative marketing research – generally used to draw conclusions – tests a specific hypothesis – uses random sampling techniques so as to infer from the sample to the population – involves a large number of respondents – examples include surveys and questionnaires
Based on observations:

  • Ethnographic studies -, by nature qualitative, the researcher observes social phenomena in their naturalsetting – observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) – examples include product-use analysis and computer cookie traces
  • Experimental techniques -, by nature quantitative, the researcher creates a quasi-artificial environment to try to control spurious factors, then manipulates at least one of the variables – examples include purchase laboratories and test markets

Researchers often use more than one research design. They may start with secondary research to get background information, then conduct a focus group (qualitative research design) to explore the issues. Finally they might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for the client.

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , , , , on November 28, 2011 by Consultant

 Decision Makers

 Finally, a point to consider is, given the characteristics of your offering, what type of decision maker will most likely be interested in purchasing from you. It may be beneficial to rank your prospects based on the following classifications. While you may not be able to make this classification of the prospect prior to the first contact, if your sales personnel are sensitive to these characteristics it can strongly influence your sales strategy.
Ultra Conservative – don’t rock the boat, whatever they purchase must be consistent with their current way of doing things.

  • They are most likely interested in products/services that are improvements to existing offerings rather than something new.
  • Once established as a customer they are seldom inclined to review alternatives.
  • Very negative to technically complex offerings or offerings requiring extensive user education.
  • Cost effective offerings are only of interest if they don’t disturb the status quo.
  • They are likely to react positively to any volume purchasing opportunities.

Conservatives – are willing to change, but only in small increments and only in a very cost effective manner.

  • Will consider new products/services but only if related concept has been proven to be effective. More likely to purchase improvements to existing offerings.
  • Will probably want to review competitive offerings, but will gravitate to best known offering with lowest risk decision.
  • Negative to neutral when considering technically complex offerings or offerings requiring extensive user education.
  • Strongly influenced by cost effective offerings and/or ‘best price’ opportunities

Liberals – regularly looking for new solutions, willing to make change (even major change) if the benefit can be shown.

  • Will usually consider new products/services even if the related concept has not yet been proven to be effective, but only if the potential benefits can be specified and understood.
  • Wants offerings that make effective use of technology, but is not interested in offerings just because they use a certain technology.
  • Will always want to review competitive offerings, but will usually choose the one offering the greatest benefit, even if there is some risk involved.
  • Neutral to positive when considering technically complex offerings or offerings requiring extensive user education.
  • Usually concerned with keeping employees informed and educated, so will often consider educational offerings.
  • Strongly influenced by offerings that most closely deliver the ‘end results’ desired, even if they are not the most cost effective.
  • Often are on social trend bandwagons so react positively to offerings that address these needs.

Technical Liberals – enamored with the benefits provided by high tech solutions and any purchase decision will be biased by the technical content of the offering.

  • Usually consider new products/services even if the related concept has not yet been proven to be effective.
  • Often consider just because they use a certain technology.
  • Will always want to review competitive offerings, but will usually choose the one offering the most hi-tech features, even if there is some risk involved.
  • Consider themselves technically competent and will expect leading edge use of technology.
  • Positive to fanatic when considering technically complex offerings even when requiring extensive user education.
  • Conversion costs usually not a major concern if technical benefits are there.
  • Not particularly concerned with keeping employees informed and educated, so educational offerings are not of great interest.
  • Strongly influenced by offerings that most closely deliver the ‘end results’ desired, even if they are not the most cost effective.

Self Helpers – consistently defines/designs solutions to their problems, likes to acquire tools that help in the innovation process.

  • Will usually consider new products/services, but the related concept must have been proven to be effective.
  • Often consider just because they use a certain technology that is relevant to the development program they have underway.
  • Will always want to review competitive offerings, but will usually choose the one offering the most effective ‘do it yourself’ features.
  • Usually consider themselves technically competent and will expect very effective use of proven technology.
  • Not especially inclined toward technically complex offerings, would rather have user friendly, but thought provoking, offerings.
  • Conversion costs usually not a major concern if offering promises potential for innovation.
  • Usually concerned with keeping employees informed and educated, so educational offerings are of interest.

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , on November 27, 2011 by Consultant

Multichannel Consumer Marketing Plan

A multichannel consumer marketing plan enables you to reach consumers by the channels they prefer and to increase revenue per customer. Research firm Epsilon Targeting reported that households buying from retailers with a multichannel strategy spent an average of $832 in 2010, compared to spending $385 with retailers selling through a contact center and $360 for retailers operating an online strategy.

Online Information

Identify the channels that consumers use to obtain product information before making purchases. According to consultants Booz & Co., consumers use online sources to carry out product research and to obtain contact information for other marketing channels, such as store locations or contact center numbers. Provide comprehensive product and contact information on your website. Consumers also visit product review sites, social media such as Facebook and forums to check the opinions of other consumers. Set up a forum on your website and monitor review sites to understand consumers’ perceptions of your products.

Purchasing Channels

Select the channels that enable you to reach consumers cost effectively. Consumers buy products through mail order, contact centers, catalogs, retail outlets, e-commerce sites and TV shopping channels. Analyze your sales records to identify current channels that provide the main source of revenue. Review competitors’ websites to see if they use channels that you have not considered. You may miss opportunities by ignoring channels. Booz & Co. reported that German businesses that focused on single channels wasted more than $1.5 billion a year in unproductive marketing.

Integrated Strategy

Develop an integrated multichannel strategy, not a fragmented multiple channel strategy. An integrated multichannel strategy ensures that you offer consistent marketing messages and quality of customer experience across all channels, according to consultants McKinsey and Company. A consumer can research products on your website, contact your call center to obtain more detailed information and visit a retail outlet to inspect or purchase the product, with a consistent experience at each stage.

Data Analysis

Collect sales and contact data from all your channels to build a complete picture of consumers’ research and purchasing patterns. Use the data to match channels, personalize communications and make special offers based on consumers’ preferences. The data from multichannel marketing provides the basis for building an effective one-to-one marketing program with individual consumers, according to Epsilon Targeting.

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , on November 27, 2011 by Consultant

The Role of a Consumer in a Free Enterprise

Free enterprise is a type of economic system. It is also known by the names capitalism and free market. A free enterprise economy is made up of consumer spending, business investments and government purchases. Each of these parts play an important role in the free enterprise economy. Consumers are an important part of a free enterprise economy. Consumers usually represent the largest group in this economy and provide a significant portion of a nation’s economic growth.

Facts

The United States is the largest representation of a free enterprise economy. According to Russell Kirk, author of “Economics: Work and Prosperity”, consumers in the United States represent approximately 70 percent of the overall economy. Free enterprise economies allow consumers to make decisions according to their self interest. Consumers free to make their own decisions regarding economic purchases are a part of the economic theory known as the “invisible hand.” The invisible hand represents the free flow of economic resources based on the supply and demand between consumers and producers.

Types

Consumers in a free enterprise economy make different types of purchases. Standard, non-durable, durable and luxury are a few different types of consumer purchases. Standard consumer purchases of represent the items a consumer needs to live up and the basic quality of life nondurable purchases is an item that last up to three years. Paper products, plastics and cosmetics represent nondurable goods. Durable goods last more than three years; these purchases include cars and homes. Luxury purchases represent high quality, expensive of goods, such as jewelry or high-end durable goods.

Function

National governments often track the type of consumer purchases in a free enterprise economy. These numbers can provide governments and businesses with copious amounts of important information. Consumer spending can indicate the overall consumer confidence under current market conditions and the amount of discretionary consumer income. Discretionary income is the amount of money consumers have after paying for basic goods, such as food, clothing and shelter.

Theories/Speculation

Consumers in free enterprise economies usually rely on limited government involvement. Governments should avoid instituting significant regulations or taxes they can retard the economic growth driven by consumer spending. Tight monetary or fiscal policies can restrict the growth of consumer income and limit the amount of consumer credit available. Governments who intervene or increase purchases for public entities can also limit the amount of resources available to consumers. This forces consumers to save money rather than spend it.

Significance

Free enterprise economies can face dire consequences from a lack of consumer spending. Consumers who decrease spending can force free enterprise economies into recessions or depressions. Recessions are usually defined as two or more quarters of reduced gross domestic product. Gross domestic product represents the production output of companies attempting to meet consumer demand. Depressions are an extended recession that lasts for several quarters, due in part from the lack of consumer spending.

Posted in Consumer Behavior, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , , , on November 27, 2011 by Consultant

Why Is the Expectation of a Consumer Important in Marketing?

Small businesses often spend time and effort developing marketing strategies for reaching consumers. These marketing strategies attempt to inform consumers about various attributes of a company’s products, but they may also be affected by the target market, or demographic groups at which the marketing is aimed. An important part of a marketing strategy is meeting consumer expectations.

Facts

Consumer expectation generally refers to the needs and wants of individuals in the economic marketplace. Such expectations are usually driven by people’s preconceived ideas regarding goods or services. These ideas drive consumers to purchase one item over another or avoid companies with which they’ve had a previous bad experience. Consumers may also have high expectations for new products that have been given a lot of exposure through professional reviews or other media commentary.

Purchase Decisions

Marketing strategies often focus on consumer expectations in order to influence the purchase decisions made by consumers. Consumers can be broken down into three groups: those who are expected to buy, those who are not expected to buy, and those who are undecided about making a purchase. Businesses often focus on the latter two groups in order to persuade them to purchase their products.

Dispel Rumors

Negative consumer expectations are an important focus for marketing strategies, because companies may need to dispel rumors or bad impressions about their goods or services. These may be spread by competitors or individuals who have had a previous poor experience with the company. Since such rumors can lower consumer expectations, marketing strategies must address them and focus on correcting consumer expectations regarding a company’s products.

Promote Customer Service

Companies may use marketing strategies to promote their customer service and how it will meet consumer expectations. While consumers may feel wary about purchasing a product from a company, marketing strategies focusing on customer service techniques such as efficiency, reliability and competence may help soothe this uneasiness. Consumers may also have naturally high expectations regarding customer service, and companies can try to meet this expectation by touting their strong customer service department.

Expert Insight

A professional marketing or advertising agency can help companies understand current consumer expectations and tailor advertisements accordingly. Professional advertising agencies may also provide specific resources relating to target markets or demographic groups and the expectations each group has toward specific goods or services. These resource can save companies valuable time when developing new marketing strategies and promoting products.

Posted in Consumer Behavior with tags , , , , , , , , on November 21, 2011 by Consultant

Product / Servicing Selection For  Decision Making

Problem Recognition.  One model of consumer decision making involves several steps. The first one is problem recognition—you realize that something is not as it should be.  Perhaps, for example, your car is getting more difficult to start and is not accelerating well.    The second step is information search—what are some alternative ways of solving the problem?  You might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi, or ride a skateboard to work.  The third step involves evaluation of alternatives.  A skateboard is inexpensive, but may be ill-suited for long distances and for rainy days.   Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a product to the store because you did not find it satisfactory).  In reality, people may go back and forth between the stages.  For example, a person may resume alternative identification during while evaluating already known alternatives.

Consumer involvement will tend to vary dramatically depending on the type of product.  In general, consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are highly significant in the consumer’s life in some other way (e.g., a word processing program or acne medication).

It is important to consider the consumer’s motivation for buying products.  To achieve this goal, we can use the Means-End chain, wherein we consider a logical progression of consequences of product use that eventually lead to desired end benefit.  Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of power, which ultimately improves the consumer’s self-esteem.  A handgun may aim bullets with precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm the consumer’s family, which achieves the desired end-state of security.  In advertising, it is important to portray the desired end-states.  Focusing on the large motor will do less good than portraying a successful person driving the car.

Information search and decision making.  Consumers engage in both internaland external information search.

Internal search involves the consumer identifying alternatives from his or her memory.  For certain low involvement products, it is very important that marketing programs achieve “top of mind” awareness.  For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer must be able to retrieve one’s restaurant from memory before it will be considered.  For high involvement products, consumers are more likely to use an external search.  Before buying a car, for example, the consumer may ask friends’ opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships.  Thus, firms that make products that are selected predominantly through external search must invest in having information available to the consumer in need—e.g., through brochures, web sites, or news coverage.

compensatory decision involves the consumer “trading off” good and bad attributes of a product.  For example, a car may have a low price and good gas mileage but slow acceleration.  If the price is sufficiently inexpensive and gas efficient, the consumer may then select it over a car with better acceleration that costs more and uses more gas.  Occasionally, a decision will involve a non-compensatory strategy.  For example, a parent may reject all soft drinks that contain artificial sweeteners.   Here, other good features such as taste and low calories cannot overcome this one “non-negotiable” attribute.

The amount of effort a consumer puts into searching depends on a number of factors such as the market (how many competitors are there, and how great are differences between brands expected to be?), product characteristics (how important is this product?  How complex is the product?  How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in analyzing product characteristics and making the best possible deal?), and situational characteristics (as previously discussed).

Two interesting issues in decisions are:

  • Variety seeking (where consumers seek to try new brands not because these brands are expected to be “better” in any way, but rather because the consumer wants a “change of pace,” and
  • “Impulse” purchases—unplanned buys. This represents a somewhat “fuzzy” group.  For example, a shopper may plan to buy vegetables but only decide in the store to actually buy broccoli and corn.  Alternatively, a person may buy an item which is currently on sale, or one that he or she remembers that is needed only once inside the store.

A number of factors involve consumer choices.  In some cases, consumers will be more motivated.  For example, one may be more careful choosing a gift for an in-law than when buying the same thing for one self.  Some consumers are also more motivated to comparison shop for the best prices, while others are more convenience oriented.  Personality impacts decisions.  Some like variety more than others, and some are more receptive to stimulation and excitement in trying new stores.  Perception influences decisions.  Some people, for example, can taste the difference between generic and name brand foods while many cannot.  Selective perception occurs when a person is paying attention only to information of interest.  For example, when looking for a new car, the consumer may pay more attention to car ads than when this is not in the horizon.  Some consumers are put off by perceived risk.  Thus, many marketers offer a money back guarantee.  Consumers will tend to change their behavior through learning—e.g., they will avoid restaurants they have found to be crowded and will settle on brands that best meet their tastes.  Consumers differ in the values they hold (e.g., some people are more committed to recycling than others who will not want to go through the hassle).  We will consider the issue of lifestyle under segmentation.

Families and Family Decision Making

The Family Life Cycle. Individuals and families tend to go through a “life cycle:” The simple life cycle goes from

  

For purposes of this discussion, a “couple” may either be married or merely involve living together. The breakup of a non-marital relationship involving cohabitation is similarly considered equivalent to a divorce.

In real life, this situation is, of course, a bit more complicated. For example, many couples undergo divorce. Then we have one of the scenarios:

Single parenthood can result either from divorce or from the death of one parent. Divorce usually entails a significant change in the relative wealth of spouses. In some cases, the non-custodial parent (usually the father) will not pay the required child support, and even if he or she does, that still may not leave the custodial parent and children as well off as they were during the marriage. On the other hand, in some cases, some non-custodial parents will be called on to pay a large part of their income in child support. This is particularly a problem when the non-custodial parent remarries and has additional children in the second (or subsequent marriages). In any event, divorce often results in a large demand for:

  • Low cost furniture and household items
  • Time-saving goods and services

Divorced parents frequently remarry, or become involved in other non-marital relationships; thus, we may see

       

Another variation involves

       

Here, the single parent who assumes responsibility for one or more children may not form a relationship with the other parent of the child.

Integrating all the possibilities discussed, we get the following depiction of the Family Life Cycle:

Generally, there are two main themes in the Family Life Cycle, subject to significant exceptions:

  • As a person gets older, he or she tends to advance in his or her career and tends to get greater income (exceptions: maternity leave, divorce, retirement).
  • Unfortunately, obligations also tend to increase with time (at least until one’s mortgage has been paid off). Children and paying for one’s house are two of the greatest expenses.

Note that although a single person may have a lower income than a married couple, the single may be able to buy more discretionary items.

Family Decision Making. Individual members of families often serve different roles in decisions that ultimately draw on shared family resources. Some individuals are information gatherers/holders, who seek out information about products of relevance. These individuals often have a great deal of power because they may selectively pass on information that favors their chosen alternatives. Influencers do not ultimately have the power decide between alternatives, but they may make their wishes known by asking for specific products or causing embarrassing situations if their demands are not met. Thedecision maker(s) have the power to determine issues such as:

  • Whether to buy;
  • Which product to buy (pick-up or passenger car?);
  • Which brand to buy;
  • Where to buy it; and
  • When to buy.

Note, however, that the role of the decision maker is separate from that of the purchaser. From the point of view of the marketer, this introduces some problems since the purchaser can be targeted by point-of-purchase (POP) marketing efforts that cannot be aimed at the decision maker. Also note that the distinction between the purchaser and decision maker may be somewhat blurred:

  • The decision maker may specify what kind of product to buy, but not which brand;
  • The purchaser may have to make a substitution if the desired brand is not in stock;
  • The purchaser may disregard instructions (by error or deliberately).

It should be noted that family decisions are often subject to a great deal of conflict. The reality is that few families are wealthy enough to avoid a strong tension between demands on the family’s resources. Conflicting pressures are especially likely in families with children and/or when only one spouse works outside the home. Note that many decisions inherently come down to values, and that there is frequently no “objective” way to arbitrate differences. One spouse may believe that it is important to save for the children’s future; the other may value spending now (on private schools and computer equipment) to help prepare the children for the future. Who is right? There is no clear answer here. The situation becomes even more complex when more parties—such as children or other relatives—are involved.

Some family members may resort to various strategies to get their way. One isbargaining—one member will give up something in return for someone else. For example, the wife says that her husband can take an expensive course in gourmet cooking if she can buy a new pickup truck. Alternatively, a child may promise to walk it every day if he or she can have a hippopotamus. Another strategy is reasoning—trying to get the other person(s) to accept one’s view through logical argumentation. Note that even when this is done with a sincere intent, its potential is limited by legitimate differences in values illustrated above. Also note that individuals may simply try to “wear down” the other party by endless talking in the guise of reasoning (this is a case of negative reinforcement as we will see subsequently). Various manipulative strategies may also be used. One is impression management, where one tries to make one’s side look good (e.g., argue that a new TV will help the children see educational TV when it is really mostly wanted to see sports programming, or argue that all “decent families make a contribution to the church”). Authorityinvolves asserting one’s “right” to make a decision (as the “man of the house,” the mother of the children, or the one who makes the most money). Emotioninvolves making an emotional display to get one’s way (e.g., a man cries if his wife will not let him buy a new rap album).