Several years ago, I read a sports magazine interview with Wayne Gretsky, the great ice hockey legend. Gretsky was asked to what he attributed his hockey talent. He said he always moved to where the puck was going, not to where it was. That is our challenge as we try to predict buyer behavior. We must understand where our customers are moving, not where they are. We must be in front of them!
To understand consumer behavior, we need to comprehend consumers needs and wants, their perceptions, how they learn, their motivations and emotions, how they form attitudes and how they make purchase decisions. Consider this. Who will buy more than 60 percent of all new cars? Who already spends more than $90 billion on new and used cars, trucks and automotive accessories? Who influences 80 percent of all automotive-buying decisions? Women – yes, women! While both men and women value a car’s dependability, women consider quality a higher priority.
Women also rank the importance of low price, ease of maintenance and safety higher than men, men view horsepower and acceleration as being more important. Sixty-six percent of women dislike the car-buying process. How did automakers know this? They spent millions of dollars in consumer research to investigate these buying behaviors. While you don’t have to spend millions to know your customers’ purchase behavior, successful firms do understand their customers’ needs and wants.
The Buyer’s Journey
I will examine the actions a person takes in purchasing and using products and services, including the mental and social processes that precede and succeed those actions. I will help you answer questions such as why people chose one product or brand over another, how they make these choices and how you can use this knowledge to provide value to your customers.
Recognizing the Problem
We all go through a predictable process when we make purchase decisions. The first stage is problem recognition. This can be as simple as finding an empty milk carton in your refrigerator, your college freshman son or daughter determining that their clothes from last year are not in style, or realizing that your home computer is a relic.
After recognizing a problem, we begin to search for information. First, we scan our memory for previous experiences with similar products or brands (an internal search). When past experience or knowledge is insufficient or when the risk of making a wrong decision is high, we search external sources by asking our friends, family, consulting a consumer guide, searching the Internet or seeking other information sources.
Value = Pricing + Benefits
As we gather information, we assess the value of each alternative. Value is represented by some combination of price and benefits. When we observe a price we instinctively compare it to the price of other competing products or services. We subjectively assign to it a category…
expensive, moderate or cheap…
Then we consider the benefits of the product or service such as quality, reputation, utility and other attributes in comparison to similar products or services. Consumers often have several criteria for evaluating brands.
Knowing this, marketers try to identify the most important evaluative criteria that consumers use when judging brands. The challenge to marketers is to make their product or service offering unique by differentiating it from competitors, and try to position their offering high on the consumer’s list of alternatives being considered for purchase.
The Purchase Decision
Having examined the alternatives, consumers are ready to make the purchase decision. Two decisions remain:
- from whom to buy
- when to buy
The choice of which seller to buy from will depend on such considerations as…
- the terms of sale,
- your past experience buying from that seller
- the return policy
Deciding when to buy is frequently determined by a number of factors. For example, you might buy sooner if one of your preferred brands is on sale or its manufacturer offers a rebate. Other factors include friendliness of sales people, whether the shopping experience was pleasant and the financial circumstances.
After the Purchase
After buying a product or service, the consumer compares it with his or her expectations and is either satisfied or dissatisfied. If a consumer has prior experience with similar products or services his or her expectations are high. Conversely, if the consumer lacks prior experience, his or her expectations are low. If the consumer is dissatisfied, marketers must decide whether the product or service was deficient or consumer expectations were too high. The rule of thumb is to under- promise and over-deliver.
Studies show that satisfaction or dissatisfaction affects consumer communications and repeat purchase behavior. Satisfied buyers tell three other people about their experience, but dissatisfied buyers complain to nine people. Satisfied buyers also tend to buy from the same seller each time a purchase occasion arises.
Understanding how our Customers Behave is not Simple
Our customers may say one thing but do another. They may not be in touch with their deeper motivations. Our challenge, as marketers, is to comprehend what happens in the buyer’s consciousness between the arrival of some outside stimuli (economic, cultural, social, technological) and our customer’s purchase decisions. Psychology helps us understand why and how our consumers behave as they do. In particular, concepts such as motivation and personality, perception, learning, values, beliefs, and attitudes, and lifestyles are useful for interpreting our customer’s buying processes. Let’s explore some of these purchase behavior influencers.
First Consider Purchase Motivation
Motivation is the energizing force that results in behavior that satisfies a need. Psychologists tell us we have two basic needs: physiological (water, food, sex, shelter) and psychological (belonging, acceptance, being loved, self-fulfillment).
Next we Look at Personality
Our personality is enduring and consistent. Personality traits include assertiveness, extroversion, compliance, dominance and aggression. Research suggests that compliant people prefer known brand names and use more mouthwash and toilet soaps. In contrast, aggressive types use razors, not electric shavers and apply more cologne and after-shave lotions.
Perception is Reality
In marketing we say, “Perception is reality.” What this means is that the actual reality matters little; what matters is the consumer’s perception of a product or brand. Where one person sees a Cadillac as a mark of achievement, another sees the car as ostentatious. Perception is the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world. For example, cereals are sometimes produced to be darker in color to make them appear more masculine, while mouthwashes are colored green or blue to create a clean, fresh feeling.
Another characteristic of individuals that describes them in terms of their psychological and behavioral makeup is called psychographics. For example, people’s need to seek affiliation or peer approval may draw them to theaters or the golf course. This behavior becomes part of their psychographics. This psychographic in turn drives them to buy golf equipment.
The last factor influencing purchase behavior we will examine is attitude. Attitudes are never neutral; they are either positive or negative. Attitudes are formed on the basis of some experience about the object. Because attitudes always cause a consistent response, they can be used to predict behavior. Marketers therefore measure attitudes before launching new products. Our customers evaluate items in terms of goodness or desirability. Consumers may hold attitudes toward salespeople in general (for example, ”Salespeople are basically all hucksters”), or about specific companies (such as, “Company XZ is a company that makes good electronic appliances but not good computers”).
In this article we defined consumer behavior, discussed various processes involved in consumer behavior, and described how several psychological processes are related to our customer’s decision making. To better understand buyer behavior, consider a major purchase you have made (car, house or computer system for example) and relate your purchase process to the concepts discussed above. If you can understand how you make your purchase decisions, you’re on your way to predicting how your customers make their decisions.