Author: Gary Z. Bizzo
Originally published on Equities.com
For the past 60 or so years marketers have consistently tried to find the ultimate way to entice consumers to buy the products they are flogging.
The traditional marketing industry believed that people made buying decisions based on rational, conscious thought processes.
Science turned that fundamental belief on its head and has proven most decision-making happens at the subconscious level. The subliminal mind makes people decide one way or another. Neuroscience continues to research how to change our buying decisions.
What does this mean to the young marketing executive hired by the startup founder to have his product on the mind of everyone and to make his company successful?
It means an understanding of consumer behavior must take into account everything from the psychological reasons to purchase as well as the sociological and anthropological, and a lot more – phew!
So, what types of consumer behavior affect buyers in the shopping mall?
Programmed or routine purchases probably are at the top of a marketers mind. You know the product that you pick up as you speed through the drug store after a tough day at work. You needed toothpaste and grabbed the closest to the cart in the aisle. It doesn’t matter; toothpaste is all the same, right? It could also mean that the toothpaste you chose is always in that same spot on the shelf and it’s a no-brainer decision. You’ve had past experience with purchasing it and automatically make the decision to purchase again. Brand recognition, whether it’s just a familiar color or shape) plays a large part in routine response behavior.
Occasional purchases are limited decision-making ones. You need ice for the BBQ, you find it at the front of the store where you’d expect and the decision is made.
Complex decision-making product purchases are where marketers show their magic. What part of purchasing that car or a new laptop will be affected by emotion and/or rational thinking? Here’s where the psychological nuances, the belief systems and the attitudes come into play.
And then there’s most dangerous buying decision for the consumer – impulse buying. Impulse buying disrupts the normal decision making models in consumers' brains. Research suggests that emotions and feelings play a decisive role in purchasing, triggered by seeing the product or upon exposure to a well-crafted promotional message. Marketers and retailers tend to exploit these impulses that are tied to the basic want for instant gratification.
Impulse buying is based on emotion not reason and relies more on the merchandising of the product by the store rather than the manufacturer. They are the products on the end of an aisle in the store with 10% off or those inexpensive ‘stocking stuffers’ people seem to find everywhere running up to Christmas. Retailers rely on your unchecked impulses to spur sales.
Ok, so now that I’ve explained the types of behavior that go into buying a product let’s talk about the decisions and actions that complete the transaction. There’s about four of them:
How do marketing campaigns work? They know by consumer behavior how to motivate the buyer into putting money in your pocket. Blue suggests honesty, red is power, and positioning a product mid height on a shelf is more conducive to purchasing it (it also helps that it is at the average height for most people to easily reach). Marketers need to know how to motivate.
Perception is based on a feeling the product is exclusive; worth the money or not worth the effort. Evoking a feeling or emotion will sell every time. American Express has the most famous modern example of exclusivity in advertising with the tagline: “Membership has its privileges.” Rolls Royce has the dibs on most prestigious auto.
Learning to buy in a marketing campaign comes from Pavlov’s experiments. Consumers "learn" their buyer behavior through drives, cues, responses, and reinforcement. Drives are strong internal stimuli that create calls for action and the response to the drive is the action – to purchase.
A simple example is when people hear the ice cream truck music they run to the street to buy an icy treat. Just like Pavlov’s dog we learn to respond to a stimuli.
A campaign that offers an experiential feel to it will sell product. It is often called engagement marketing. I remember watching Felix Baumgartner‘s jump from a balloon in 2012 from an altitude of 128,000 ft. Called the ‘Stratos’ jump, it was sponsored by Red Bull. For a few seconds I felt that man’s plummet to earth and images of drinking Red Bull giving a person the power to do it rang in my head.
Through our daily activities, we build beliefs and attitudes that 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. 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. With this understanding they can understand how to launch focused messaging campaigns to change beliefs about our products and brands.
Economic conditions obviously affect consumer behavior. In 2008, in Vancouver, the lower end restaurants (sorry McDonalds) and the luxury restaurants seemed unaffected by the recession. Poorer people and rich people still ate at their usual haunts while the middle class tightened belts. I almost bought a beer distribution company in 2008 because while people were keeping investments close to their chest people still wanted to ‘drown their sorrows’ with beer. Deciding not to purchase it was probably good for my waistline.
Ok, personal preferences must come into the mix and there is often no accounting for taste but it is based on our preferences. Do you prefer toothpaste with a red label or a blue one? Do you like the white branding of Apple products in the Apple Store? Marketers are watching, listening and responding to what they perceive is your preference to a certain color, sound, feeling and more.
The biggest influence on consumer behavior is cultural and group influences. The latest shoe, dress, trend is based on others close to us promoting it. Ethnicity, cultural mores, geography also determine the buying patterns of consumers. Selecting the perfect spokesperson hinges on the culture that the campaign is targeting. India has cricket stars and America has basketball icons.
So, you’ve developed a product, hired great staff, you consider your startup ready for business then someone tells you about how consumer behavior is influenced by psychological, sociological and anthropological issues – what?