Consumer Behavior
Consumer Decision Process
Your book layout the consumer decision process with a simple chart with 5 steps. This is similar to the marketing funnel I presented. There are versions of the marketing funnel that have 7 steps down to versions with 3 steps. All of these approximate the same ideas. I happen to be partial to the funnel because the funnel narrows as does the consumer's choices as they go through the process.
I also quibble slightly that the process in the book starts with "need recognition". Yes, in some cases we recognize a need as a consumer and go to the information search step but sometimes we don't recognize a need until we see something we want. The book's version places all the steps in the consumer's hands and while the buying decision is ultimately the consumer's decision, the reality is that through marketing, business drives sales. Business doesn't sit around idly while we wait for the potential customer to recognize their need. We either want the customer to be aware of us so that when the need arises they think of our product or service or becoming aware of our product or service is what sparks the consumer to want the product. Marketing is story telling. We are constantly telling our story.
I have created music for decades and I have made videos for years. I have always had top of the line equipment. It's the only way to be competitive. If music software companies weren't telling their stories so that I was aware of the latest software or hardware and how that would make my music or videos better and give me an edge on my competition, I'd still be using the same equipment I started with until it stopped working. Then I would have started looking at new gear. So it's not just the consumer becoming aware of a need, it's a company developing a relationship with the consumer and providing information that creates the need. Believe me it would have been a whole lot cheaper to wait until my gear broke down to buy new stuff but that is not the way technological improvements work.
There are situations where purchases are strictly needs based. I just bought a new dishwasher because our old dishwasher was beginning to leak. Our dishwasher was 12 years old, and when I looked up the expected life of that dishwasher it said 10 to 12 years. I knew that repairing it would be expensive and most likely cost half as much as as a new dishwasher. The likelihood was it would need to be repaired constantly going forward. Purchasing a new dishwasher was a need. I followed the steps the book laid out but they also matched the marketing funnel steps.
My in-laws had just replaced their dishwasher and raved about their new one a couple months before ours started leaking. So I was aware of their dishwasher before I had a need. As it turned out, it was the same brand as our old one and after a quick internet search and look at the reviews of rival products, we purchased the same model as my in-laws.
For this reason I like "Awareness" from the marketing funnel. It implies an exchange of information and communication not just need recognition. The funnel combines information search and alternative evaluation into consideration which I think is more accurate. It feels like one process to me. "Purchase and Consumption" translates to "Conversion" but again purchase and consumption sounds like it's all in the hands of the consumer when the process is more of an exchange. Conversion implies a process. When a sale doesn't happen, marketers look at where the breakdown happened in the process. For instance, someone places something in their online shopping cart but doesn't complete the sale. What happened? Why? Did they put the wrong sized product in their cart? Did they change their mind? Was the shipping too expensive? This happens a lot and online marketers spend a lot of time and money to try and figure out why there wasn't a conversion.
"Post Purchase" goes to "Loyalty" but there is more of an active meaning in loyalty. It equates to satisfaction and advocacy and a relationship between the buyer and seller. It may seems like a small thing but companies that look at their customers with that kind of concern and connection prioritize the consumer. It makes a difference.
I have one trusted source for the music gear I buy. I have a relationship with that vender that goes back decades. I may run to Guitar Center in a pinch but there are so many times where my vender of choice, Sweetwater Sound, has taken care of me. I trust them implicitly and recommend them every chance I get. I have a couple software companies that are my go tos. Same deal. I am loyal to their products because they have great customer service and they make me better at what I do. I've spent tens of thousands of dollars with these companies. It is a relationship.
Why do people buy?
Motives
There are 4 components that bring value to people's lives that determine whether they will buy a product. Let's take what components might go into the purchase of a bottle of water. The decision as to which bottled water you choose tends to by based in one of these 4 components.
Functional Value- Does it quench your thirst and hydrate you?
Money Value- what does it cost versus its perceived worth to the customer. Do you buy a case of store brand water at Walmart or Costco to fill the cooler or do you want to spend more and buy Dasani?
Social Value —is the extent to which owning a particular product allows consumers to connect with others. For example
there is a social value of buying a brand that brings you together with others. When I had meetings at Movie studios or talent agencies in LA they always served Fiji water. ALL OF THEM. It was a prestige thing. More expensive equals better. There was a cool factor to it. If a big star was coming in they would always ask what they like to drink or eat as a snack and have it on hand even if it meant some poor production assistant had to run from one side of town the other to different stores in rush hour to get the right water, food or candle to burn during the meeting.
Psychological Value — is the extent to which owning a product allows customers to express themselves or make themselves feel better. Sometimes, all that customers are looking for from an exchange, a purchase, is to feel appreciated, respected, comforted or hopeful. Through branding there are two forms of psychological value:
Internal, how we feel about ourselves. (So we feel smarter when we drink Smart Water)
External, how we define ourselves to the world and influence others perceptions of us. Bling H2O, $182 a bottle. That's right, bottled water that costs $182 a bottle. Can't imagine it tastes that good.
Having lived in LA and worked in the entertainment business, the whole town runs on External Psychological Value. I can't tell you how many people I knew in town who lived in small ratty apartments but would lease a Mercedes or a Porsche to project an image.
Best example of Internal Psychological Value... I once got paired up for a quick acting audition for a TV show with an actress. We had ten minutes to run lines before the reading and she insisted we go outside in the parking lot to her car to rehearse. It was a little odd but.... okay. Her car was a full size sedan, not what most actors who normally drive small cars to be able to park easily. When we got to her car she popped the trunk and it was full of shoes, and I mean a lot of shoes, neatly organized by type, color and designer (thousands of dollars worth). She had everything from stilettos to army boots. She read through the script, reached in the trunk and pulled out a specific pair of shoes. She told me she had extremely sensitive feet and different pairs of shoes made her feel like different characters. I have to admit that different shoes can affect the way you walk and move but for her it was foundational to her performance. Whatever works!
The book outlines a lot of factors like learning and memory, sensory, culture, situational, etc.. Know what they are because they will probably be on the test. They all fit in the 4 components above and I think it's cleaner to use these 4 categories but for the test be aware of the list the book provides.
Maslow's Hierarchy of Needs
Maslow's work has been something I have used throughout my career in business and as creative talent. When you know where your product sits in Maslow's hierarchy of needs and where your consumer sits in it then how you approach marketing the product becomes clear. I have also used it as a writing tool to develop characters or write a script or song.
The biggest take away is that someone who is on the physiological needs level can't move up to the next level until physiological needs a met. If you don't have food then whether the fruit available is organic or not isn't much of a concern. If you have been diagnosed with an aggressive cancer, self-actualization isn't something you worry about very much. If you lose your job and can't pay your bills, love and belonging isn't your top priority.
Have you ever known anyone who seemed to have it all and lost it? We live in Oklahoma and sadly tornados can rip through a neighborhood and take you from self-actualization to physiological needs in a few seconds. Same with hurricanes, earthquakes, floods, war... As human beings we can be stripped down to our base needs quickly. It's amazing how resilient we can be and how people can climb back up and rebuild their lives.
In this course, we will get to market segmentation coming up in the next class and see how the hierarchy of needs plays a role in that process beyond the consumer decision process.
Persistence and Thinking it through in Marketing
Human beings are amazing creatures and determining how we think and why is a complex study. Here Malcolm Gladwell lays out how a smart and determined expert revolutionized the thought process when it comes to consumer behavior.
So what people actually like may be very different from what they say they like. What people do is more important than what people say. As marketers, we need to be aware that we can be dazzled by metrics and our own thoughts but we need to always question results and be skeptical of the obvious.